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S&P assigns ‘A’ to Overlake Hospital Medical Center
https://www.beckershospitalreview.com/finance/s-p-assigns-a-to-overlake-hospital-medical-center.html
S&P Global Ratings assigned its “A” rating to Bellevue, Wash.-based Overlake Hospital Medical Center’s proposed $94.2 million series 2017A and $84.7 million series 2017B revenue bonds.
The assignment is a result of several factors, including its strong market position, affiliation with Oakland, Calif.-based Kaiser Permanente, healthy balance sheet and growing outpatient presence. S&P also acknowledged the OHMC’s sizable capital plans and highly competitive market.
The outlook is stable.
Moody’s affirms ‘Aa3’ on Yale New Haven Health
https://www.beckershospitalreview.com/finance/moody-s-affirms-aa3-on-yale-new-haven-health.html
Moody’s Investors Service affirmed its “Aa3” rating on Yale New Haven (Conn.) Health, affecting $1.1 billion of outstanding debt.
The affirmation is a result of the health system’s strong market position, favorable operating margins, moderate capital spending, solid liquidity, manageable leverage and affiliation with New Haven-based Yale University. Moody’s also acknowledged the health system’s sizable pension, large operating lease obligations and reimbursement pressures coming from Medicaid an state hospital tax funding.
The outlook is stable, reflecting Moody’s expectation that Yale New Haven Health will maintain its healthy operating performance to offset any reimbursement pressures.
Trinity Health races to sell $889M in bonds ahead of tax changes
The possibility that Congress could eliminate federal tax breaks for a large portion of the municipal market has hospitals and other debt issuers hurrying to issue tax-free bonds before borrowing costs rise, according to Reuters.
Nonprofit hospitals and health systems issue tax-exempt bonds to finance capital projects. Under House Republicans’ tax plan, interest on newly issued private activity bonds would no longer be tax-exempt. This change would reduce financing options for some healthcare organizations by raising the cost of capital, according to S&P Global Ratings.
“From a credit perspective, higher borrowing rates can lead to budget imbalances, a challenge for all, and a hallmark of struggling credits,” said S&P.
In response to the tax bill passed by the House in November, Livonia, Mich.-based Trinity Health moved up the sale of about $889 million of new and refunding revenue bonds to this week from January 2018.
“I look at it as kind of a risk mitigation. We were able to accelerate and mitigate any risk of where these proposals may eventually land,” Dina Richard, senior vice president of treasury and chief investment officer of Trinity Health, told Reuters.
The move to eliminate tax exemptions for new private activity bonds is not included in a bill passed by Senate Republicans on Saturday, according to Reuters.
CVS Health to acquire Aetna for $69B: 5 things to know
CVS Health inked a definitive merger agreement to acquire all outstanding shares of Aetna for roughly $69 billion in cash and stock.
Here are five things to know.
1. The deal, unanimously approved by the boards of directors of each firm Dec. 3, is one of the largest transactions this year. It values Aetna at about $207 per share, higher than previous estimates of $200 to $205 per share. When including the assumption of Aetna’s debt, the transaction totals $77 billion.
2. Upon closing, Aetna’s Chairman and CEO Mark Bertolini will join CVS Health’s board of directors, along with two other Aetna leaders. Aetna will operate as a standalone business unit under the CVS Health umbrella, and the insurer’s management team will helm the subsidiary.
3. The companies said the deal will provide localized, community-based care across CVS Health’s 9,700-plus pharmacies and 1,100 clinics. Sources familiar with the deal told Reuters CVS Health plans to significantly extend health services at its pharmacies under the merger.
4. The transaction is slated to close in the second half of 2018. It is subject to regulatory approvals.
5. Rita Numerof, PhD, president of Numerof & Associates, said in an emailed statement to Becker’s Hospital Review, “Having the combined market clout puts Aetna more in a position akin to UnitedHealthcare in its ability to leverage an integrated PBM in negotiating prices and establishing preferred tiers with manufacturers.” She added, “With CVS’s large and growing clinical services footprint, Aetna can steer patients to CVS pharmacies and clinics — in many cases avoiding the costs of higher ER or other outpatient services. The merger can make expanded CVS services in-network and others out-of-network, putting additional pressure on conventional health systems to lower the costs of their outpatient services.”
