SAN FRANCISCO – Standard & Poor's Ratings Services lowered its long-term rating to 'C' from 'CCC' on California Health Facilities Finance Authority's series 1993 revenue bonds issued on behalf of Downey Community Hospital, currently doing business as Downey Regional Medical Center. The outlook is negative.

At the same time, S&P suspended the rating due to management's inability to provide any audited or unaudited financial statements for fiscals 2009, 2008, or 2007.

"We understand that management doesn't expect to be able to provide current financial statements until January 2010," said Standard & Poor's credit analyst Kenneth Gacka. "We will consider reinstating the rating if audited financial information becomes available."

The rating action reflects S&P's concern over Downey's continued financial instability over recent years. Downey filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Sept. 14, 2009. Management has indicated that they are current on bond payments to date.

Of further concern, in S&P's view, are Downey's inability to provide current financial information and the instability of the CFO position. Gacka said it is S&P's understanding that the CFO position has turned over four times in the past 10 years, with a new interim CFO starting within the last two weeks.

The medical center operates a 199-staffed-bed acute-care hospital in the City of Downey in southeast Los Angeles County. It serves a population of about 1.4 million.