OREANDA-NEWS. Fitch Ratings has downgraded the Louisville/Jefferson County Metro Government Health System, KY's variable rate revenue bonds (Norton Healthcare, Inc.) as follows:

--$35,000,000 series 2011A to 'A+/F1' from 'AA-/F1+';

--$40,000,000 series 2011B to 'A+/F1' from 'AA-/F1+'.

The Rating Outlook for the long-term rating is Stable.

The rating action is in connection with: (i) the substitution of the irrevocable direct-pay letters of credit (LOC) previously provided by JPMorgan Chase Bank, N. A. (rated 'AA-/F1+', Stable Outlook) with two substitute LOCs to be issued by PNC Bank, NA (rated 'A+/F1', Stable Outlook); and (ii) the mandatory tender of the bonds, which occurs on July 27, 2016.

KEY RATING DRIVERS:

The ratings are based on the support provided by the substitute LOCs issued by PNC Bank, NA, which have an initial stated expiration date of July 26, 2021, unless such date is extended or earlier terminated, while the bonds are in the weekly interest rate mode only for the 2011A LOC, and the daily or weekly rate mode for the 2011B LOC.

Pursuant to the substitute LOCs, the bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. The substitute LOCs provides full and sufficient coverage of principal plus an amount equal to 35 days (2011A) and 40 days (2011B) of interest at a maximum rate of 12% based on a year of 365 days and purchase price for tendered bonds, while in the weekly (2011A), and daily or weekly (2011B) rate modes. The Remarketing Agent for the bonds is Citigroup Global Markets, Inc. for series 2011A and J. P. Morgan Securities LLC for series 2011B.

RATING SENSITIVITIES

The rating is exclusively tied to the short and long-term rating that Fitch maintains on the bank providing the substitute LOCs and will reflect all changes to that rating.