(Business Wire) - As part of its ongoing surveillance review process, Fitch Ratings has downgraded the following bonds issued by the Citrus County Hospital Board (Citrus Memorial Health Foundation, Inc.), on behalf of Citrus Memorial Hospital (CMH) to 'BB+' from 'BBB'.

--$40.3 million series 2002

The Rating Outlook is revised to Negative from Stable.

Rating rationale:

• The downgrade reflects a sharp deterioration in CMH's financial profile due to an ongoing dispute with the Citrus County Hospital Board (CCHB) which collected $9.3 million in tax revenue in fiscal 2010, of which $1.6 million was remitted to CMH. This resulted in a $7.5 million operating loss (-4.3% operating margin) for fiscal 2010
• CMH's financial profile is no longer reflective of an investment grade rated entity with weak liquidity metrics, negative operating profitability and weak debt service coverage
• The Outlook revision to Negative reflects the risks and uncertainties surrounding the acrimonious relationship between CCHB and CMH and CMH's ability adjust operations to maintain profitability without the benefit of its historical tax revenue stream
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