Fitch Ratings has affirmed the 'A' rating on the following --
The Rating Outlook is Stable.
Total debt includes approximately
The bonds are secured by a pledge of gross receipts of the obligated group, debt service reserve fund, and mortgage lien.
KEY RATING DRIVERS
STRONG OPERATING CASH FLOW: The 'A' rating is supported by BVHS' strong and consistent operating profitability. Over the last three years (2010-2012), BVHS has generated operating margins between 9.2 percent and 10.8 percent and operating EBITDA margins between 16.8 percent and 18.5 percent. Through the nine-month interim period ended
STRENGTHENING LIQUIDITY: At
LEADING MARKET POSITION: BVHS maintains a stable and leading market position within its primary service area, evidenced by 74.6 percent market share through
ELEVATED DEBT BURDEN: BVHS' debt burden remains elevated for the rating category. While debt to capitalization has moderated to 38.6 percent in the interim period from 44.6 percent at 2012 year-end, MADS as a percent of revenue remains high at 4.8 percent through the nine-month interim period.
LIMITED OPERATING SCALE: BVHS' limited geographic reach within
MODERATING DEBT BURDEN: Fitch expects leverage metrics to moderate as BVHS has no plans to issue long-term debt. A moderation in debt burden combined with sustained operating profitability and further improvement in liquidity could result in upward rating movement.
BVHS is a health system based in
STRONG OPERATING CASH FLOW
The 'A' rating is supported by BVHS' strong historical operating profitability which has generated balance sheet growth and solid debt service coverage. Operating performance in 2012 and through the interim period reflects solid expense controls and improved clinical volumes, due in part to its affiliation with Nationwide Children's in 2013. Through the nine-month interim (
BVHS's unrestricted cash and investments has grown 35 percent fiscal year end 2011 from
LEADING MARKET POSITION
Compared to the prior year, BVHS grew its inpatient and delivery volumes through the nine-month interim period ending
ELEVATED DEBT BURDEN
Despite BVHS' strong profitability, MADS (
BVHS expects to maintain a moderate level of capital spending financed with cash flow over the medium term, estimated at roughly
BVHS has a variable-to-fixed rate swap in place, with a negative mark-to-market of -
BVHS covenants to disclose audited and quarterly results to the Municipal Securities Rulemaking Board's EMMA system. Disclosure includes management discussion & analysis, which Fitch believes is best practice. Disclosure has been timely and thorough, and management has been very accessible to Fitch.
Additional information is available at 'fitchratings.com'
--'Nonprofit Hospitals and Health Systems Rating Criteria', dated
U.S. Nonprofit Hospitals and Health Systems Rating Criteria
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Fitch Ratings has affirmed the 'A' rating on the following