Junk-Rated LA Children’s Hospital to Borrow for Working Capital

The Children’s Hospital Los Angeles is planning to sell $187.5 million of federally taxable municipal revenue bonds as it contends with financial pressure tied to federal and state cuts to California’s Medicaid program.

The hospital is issuing the bonds through the California Public Finance Authority, and proceeds will fund working capital, refinance outstanding debt, and cover issuance costs. They are backed by mortgage liens on some hospital properties and a pledge of gross revenues, according to the bond documents.

The junk-rated hospital is among the top-ranked children’s hospitals in the country and treats 40% of Los Angeles County’s pediatric ...