Standard&Poor's Ratings Services lowered its long-term rating and underlying rating (SPUR) to 'BBB+' from 'A+' on Palomar Pomerado Health District (Palomar Health), Calif.'s general obligation (GO) bonds outstanding. The outlook is stable. The rating action reflects our assessment of a weakening of Palomar Health's financial profile due to lower-than-expected volumes following the opening of Palomar Medical Center (PMC) in August 2012. The impact of the lower volumes is amplified by a substantial increase in capital costs now that PMC is in service and greater-than-expected start-up costs in fiscal 2013 associated with the transition to the new facility. The weaker volumes came as a result of lower-than-anticipated volumes from a contract with Kaiser Permanente, a shift from admissions to
