The rating on California Health Facilities Financing Authority's bonds, issued for Northern California Presbyterian Homes and Services (NCPHS), is based on: Strong demand in its three life-care and continuing-care retirement communities (CCRCs) as evidenced by consistently high occupancy; An experienced management team with prudent financial policies; Improving liquidity, providing a strong 322 days' cash; and A low pro forma debt burden, representing under 5% of revenues and over 5 times (x) debt service coverage. These factors are mitigated by weaker financial performance prior to fiscal 1997 and by some limitations of NCPHS' facilities, which are all more than 30 years old. Proceeds will be used to refund $10 million in existing debt and fund renovations and expansions at two CCRCs.
