The rating on Connecticut Health and Educational Facilities Authority's bonds, issued for Hospital for Special Care (HSC), reflects unique chronic disease and intensive rehabilitation service offerings, excellent demand, and an improving financial profile. Credit risks include heavy dependence on Medicaid for 74% of revenues, high debt levels, and challenges integrating a newly acquired nursing home. Bond proceeds will advance refund series 1991A bonds, formerly rated 'BBB-', of $45 million; construct an aquatic fitness center for $6.5 million; and purchase a nearby 284-bed nursing facility for $10.8 million. The 200-bed hospital provides highly unique long-term supportive care for chronically ill and physically disabled persons throughout the state of Connecticut. Most of its specialized rehabilitation services do not have statewide competitors because
