The Standard&Poor's underlying rating (SPUR) on California Health Facilities Financing Authority's bonds, issued for UCSF Stanford Health Care. The bonds are rated `AAA' based on insurance from Ambac and FSA. UCSF Stanford Health Care's underlying rating remains on CreditWatch with Negative implications. The downgrade reflects: Substantial deterioration in financial performance in fiscal 1999; Slower-than-anticipated integration of the former UCSF Medical Center and Stanford Health Services; and Recent action by the parent universities to reassess the current organizational structure of USHC, followed by the resignations of the Chief Executive Officer and Chief Operating Officer of the system. A lower rating is precluded by USHC's substantial liquidity and by the system's solid market position, as Northern California's leading tertiary academic
