The rating on California Health Facility Finance Authority's bonds, issued for Little Co. of Mary Health Services, reflects: * The health system's good market position; * Continued development of a regional integrated delivery system; * A solid balance sheet, characterized by low leverage of 30% debt to capitalization and ample liquidity of 170 days cash representing 127% of pro forma debt; and * Sound system financial performance, highlighted by operating margins of 2.0%, excess margins of 5.5%, and strong pro forma debt service coverage of 7.0 times. Offsetting factors include losses at the system's nonobligated physician subsidiary and slim operating margins at two of its hospitals—Bay Harbor Hospital and San Pedro Peninsula Hospital— which have depressed overall system operating performance.
