Winkler County, TX's Series 2016 Bonds Placed On CreditWatch Negative

FARMERS BRANCH (S&P Global Ratings) Sept. 11, 2019--S&P Global Ratings has placed its 'AA' rating on Winkler County, Texas' series 2016 general obligation (GO) refunding bonds on CreditWatch with negative implications following the identification of an analytic error.
The series 2016 GO refunding bonds were assumed by Winkler County Hospital District on creation of the district in April 2017. At that time, we should have reviewed the bonds to determine whether it remained appropriate to analyze the bonds based primarily on the county's credit quality (as well as additional information from the hospital district) under our "Local Governments General Obligation Ratings" criteria (published Sept. 12, 2013).
We have determined that, in the future, it is more appropriate to analyze the bonds based on the hospital district's credit quality, rather than that of the county, under the "U.S. And Canadian Not-For-Profit Acute Care Health Care Organizations" criteria (published March 19, 2018). The boundaries of the Winkler County Hospital District are coterminous with Winkler County and, although the limited tax pledge on the area's taxable value continues to secure the bonds, in the future the operational and enterprise risks of the hospital district will be factored into the rating under these criteria. The bonds have not been refunded and there has been no change in the pledged security for the bonds.
During the 90-day CreditWatch period, we will apply our "U.S. And Canadian Not-For-Profit Acute Care Health Care Organizations" criteria to assess the credit quality of Winkler County Hospital District. Given information we have ascertained through audited financial reports on the hospital district, we expect to lower the rating, potentially by multiple notches.
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