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.
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.
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.
