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CALIFORNIA STATEWIDE CMNTYS DEV AUTH REV
CUSIP: 13080SMR2
By &Evergreen Team•Updated: Nov 18, 2025
NRStable
Overview
•Bond Name/Type: California Statewide Communities Development Authority Revenue Bonds (John Muir Health) Series 2016A – gross-revenue pledge, parity Master Indenture obligations
•Top-Line Classification: Stable (medium confidence)
•Synopsis: The Obligated Group’s 1) board-reported Maximum Annual Debt Service coverage of 6.03× on 6/30/25 ((John Muir Health Financial Statements; 2025-01-01)) and 360 days cash on hand versus an 80-day covenant floor ((John Muir Health Financial Statements; 2025-01-01)) provide a sizeable operating cushion that offsets 2) a $200 million jump in total debt during 2024 ((John Muir Health Financial Statements; 2025-01-01)) and statutory wage inflation that will lift labor costs by up to 25 % by June 2026 ((California Department of Health Care Services PACE Rate Certification Report CY 2025; 2025-01-01)). Credit impact from the debt uptick and cost escalation is mitigated within the next 12 months by current liquidity and coverage headroom.
Signal 3
Ratio of Total Net Revenues to Maximum Annual Debt Service 6.03
John Muir Health Financial Statements • 2025-01-01
Signal 1
Days Cash on Hand 360
Required 80
John Muir Health Financial Statements • 2025-01-01
Signal 5
Total Debt $582,430 $578,855 $778,867
John Muir Health Financial Statements • 2025-01-01
Signal 10
Effective October 16, 2024, California Senate Bill (SB) 525 established an increased minimum wage sc
California Department of Health Care Services PACE Rate Certification Report CY 2025 • 2025-01-01
Rationale
Baseline per Foundation Analysis
•Structure: Compensatory enterprise revenue bond; issuer (John Muir Health) bears all revenue risk—no automatic rate-setting protection.
•Covenants: Foundation notes no explicit DSC covenant; however, audited disclosure now shows a 1.20× performance floor (Signals 3, 47, 43), indicating stronger legal protections than originally cited.
•Peer context: A-level peers typically carry DSC ≈ 3.0× and DCOH ≈ 250; historical leverage ~25 % is ordinary for this cohort.
•Key risks: Revenue volatility from payer mix, expense creep, and absence of a funded reserve.
Signal Theme 1 – Liquidity & Coverage Outperformance
•Signals 1, 3, 47, 48, 46 collectively confirm liquidity (≥350 DCOH) and DSC (≥5.3×) far above the covenant floor and peer norms, strengthening the credit stance despite the foundation’s concern about reserve absence.
•Materiality path: Liquidity | Legal/Pledge
Signal Theme 2 – Rising Leverage but within Capacity
•Signals 5, 60, 61, 62 show consolidated debt rising ~$200 million in 2024 and debt-to-cap pushing to 24 – 26 %. Peer benchmarking (foundation: ~25 % normal) and large covenant headroom (maximum 60 %, (John Muir Health Financial Statements; 2025-01-01)) temper the credit impact.
Signal 46
Aggregate Indebtedness as a % of Aggregate Capitalization 24%
Maximum Allowed 60%
Compliance YES
John Muir Health Financial Statements • 2025-01-01
•Materiality path: Debt/Leverage
Signal Theme 3 – Operating Pressure & Cost Inflation
•Signals 6, 7, 67–70 evidence interim operating losses and negative margins—direct hits to the foundation’s top risk (revenue/expense volatility).
•(California Department of Health Care Services PACE Rate Certification Report CY 2025; 2025-01-01) (SB 525 $25/hour wage mandate) accelerates expense growth beginning FY-2025; no offsetting reimbursement mechanism exists, raising forward pressure on DSC.
Signal 10
Effective October 16, 2024, California Senate Bill (SB) 525 established an increased minimum wage sc
California Department of Health Care Services PACE Rate Certification Report CY 2025 • 2025-01-01
•Materiality path: Expense/O&M | Operations/Collections
Red Flags
•Statutory wage escalation ((California Department of Health Care Services PACE Rate Certification Report CY 2025; 2025-01-01)) and negative interim DSCR reading ((California Office of Statewide Health Planning and Development (OSHPD) 106074039 20241231 Sidr Sub; 2025-11-14)) affect the primary risk flagged in the foundation. Current liquidity/coverage cushions these for now but warrant monitoring.
Signal 10
Effective October 16, 2024, California Senate Bill (SB) 525 established an increased minimum wage sc
California Department of Health Care Services PACE Rate Certification Report CY 2025 • 2025-01-01
Signal 7
Debt Service Coverage Ratio (5,659,146.00)
California Office of Statewide Health Planning and Development (OSHPD) 106074039 20241231 Sidr Sub • 2025-11-14
Classification Test
•Negative developments (Signals 5, 6, 7, 10) represent incremental—not structural—deterioration and are counter-balanced by extraordinary liquidity and covenant headroom (Signals 1, 3, 46). Structural protections remain intact. → Stable
Signals & Trends
(John Muir Health Financial Statements; 2025-01-01): “Ratio of Total Net Revenues to Maximum Annual Debt Service 6.03 … Required 1.20 … Compliance YES” [Quarterly Covenant Compliance Report; 9/30/25; p.2]
Signal 3
Ratio of Total Net Revenues to Maximum Annual Debt Service 6.03
John Muir Health Financial Statements • 2025-01-01
Credit impact: Demonstrates >5× cushion above the performance floor; confirms strong debt-service capacity. Change from baseline: Positive, exceeds historical 3–4×.
(John Muir Health Financial Statements; 2025-01-01): “Days Cash on Hand 360 … Required 80 … Compliance YES” [Quarterly Covenant Compliance Report; 9/30/25; p.2]
Signal 1
Days Cash on Hand 360
Required 80
John Muir Health Financial Statements • 2025-01-01
Credit impact: Liquidity buffer equal to ~1 year of operating expense; offsets revenue volatility risk identified in foundation. Change: Improvement relative to 300 DCOH historical range.
(John Muir Health Financial Statements; 2025-01-01): “Total Debt $582,430 $578,855 $778,867” [Audited FS; 12/31/24; p.18]
Signal 5
Total Debt $582,430 $578,855 $778,867
John Muir Health Financial Statements • 2025-01-01
Credit impact: ~$200 million debt increase raises future debt service; leverage still within covenant ((John Muir Health Financial Statements; 2025-01-01)) and peer norms, but erodes flexibility. Change: Negative relative to flat leverage baseline.
Signal 46
Aggregate Indebtedness as a % of Aggregate Capitalization 24%
Maximum Allowed 60%
Compliance YES
John Muir Health Financial Statements • 2025-01-01
(California Department of Health Care Services PACE Rate Certification Report CY 2025; 2025-01-01): “SB 525 … many covered employers will be required to pay … $25.00 per hour by June 2026” [State Statute Summary; 10/16/24; p.1]
Signal 10
Effective October 16, 2024, California Senate Bill (SB) 525 established an increased minimum wage sc
California Department of Health Care Services PACE Rate Certification Report CY 2025 • 2025-01-01
Credit impact: Material labor-cost step-up (Expense/O&M) likely to compress margins absent offsetting reimbursement; directly links to foundation’s expense-control risk. Change: New cost mandate.
(California Office of Statewide Health Planning and Development (OSHPD) 106074039 20241231 Sidr Sub; 2025-11-14): “Net Income ($6,611,109)” [Quarterly Statement; 9/30/25; p.3]
Signal 6
Net Income ($6,611,109)
California Office of Statewide Health Planning and Development (OSHPD) 106074039 20241231 Sidr Sub • 2025-11-14
Credit impact: Period loss indicates earnings volatility; if sustained could reduce DSC toward covenant minimum. Change: Negative deviation from historically positive margins.
(California Office of Statewide Health Planning and Development (OSHPD) 106074039 20241231 Sidr Sub; 2025-11-14): “Debt Service Coverage Ratio (5,659,146.00)” [Quarterly Statement; 9/30/25; p.3]
Signal 7
Debt Service Coverage Ratio (5,659,146.00)
California Office of Statewide Health Planning and Development (OSHPD) 106074039 20241231 Sidr Sub • 2025-11-14
Credit impact: Negative interim DSCR underscores near-term cash shortfall risk; mitigated by 360 DCOH but bears monitoring for trend continuation. Change: Negative; contrasts with annual 6.03×.
Outlook
Base path: Expect credit profile to remain sound given current liquidity and >5× annual DSC, while management absorbs wage-driven expense growth ((California Department of Health Care Services PACE Rate Certification Report CY 2025; 2025-01-01)). No covenant breach likely under moderate revenue swings.
Signal 10
Effective October 16, 2024, California Senate Bill (SB) 525 established an increased minimum wage sc
California Department of Health Care Services PACE Rate Certification Report CY 2025 • 2025-01-01
Near-term catalysts (3-12 months)
•Implementation timeline for SB 525 wage tiers ((California Department of Health Care Services PACE Rate Certification Report CY 2025; 2025-01-01)) – cost run-rate clarity.
Signal 10
Effective October 16, 2024, California Senate Bill (SB) 525 established an increased minimum wage sc
California Department of Health Care Services PACE Rate Certification Report CY 2025 • 2025-01-01
•FY-2025 audited results – will confirm whether interim operating losses (Signals 6, 7) persist.
•Any additional debt issuance beyond current plan – leverage monitoring ((John Muir Health Financial Statements; 2025-01-01)).
Signal 5
Total Debt $582,430 $578,855 $778,867
John Muir Health Financial Statements • 2025-01-01
Downside scenario: A sustained negative operating margin combined with another $100 million debt draw could depress DSC toward the 1.20× floor, triggering rating/market attention and pushing classification toward Cautious.
Upside scenario: Successful expense offsets (e.g., productivity gains) that hold FY-2025 DSC ≥4× despite wage inflation, and no further borrowing, could strengthen perception and move outlook toward Opportunity.
Appendix
•Quarterly Covenant Compliance Report; 9/30/25; pp.1-3
•Audited Financial Statements; 12/31/24; p.18
•State Statute Summary (SB 525); 10/16/24; p.1
•Quarterly Statement; 9/30/25; pp.3-4
Data QA Notes
•Foundation analysis states “no explicit DSC covenant”; current disclosures (Signals 3, 47) show a 1.20× requirement—likely an omission in the 2016 OS excerpt.
•Current rating provided as “NR” conflicts with 2016 OS ratings (A1/A+); assume rating now withdrawn.
•Signals 6 & 7 present unexplained formatting/metric anomalies; treated as interim period data but reliability moderate.
Full Signal Details: (see CLEANED_SIGNALS list for verbatim text and citations).