Fitch Ratings has assigned 'AA ' ratings to the following bonds expected to be issued by the --
The Rating Outlook is Stable.
The series M-5 bonds are expected to be issued as floating rate notes. Bond proceeds will be used to refund Partners' outstanding series 2003 D-3 bonds, currently weekly variable rate demand bonds backed by a standby bond purchase agreement from
Pro forma maximum annual debt service (MADS) is expected to equal
Bond payments are an unsecured obligation of the
KEY RATING DRIVERS
LEADING MARKET POSITION: Partners' leading market share in a competitive service area and its national reputation for clinical excellence provide for a great degree of credit stability. Partners' national reputation and market position are enhanced by its role as the primary teaching affiliate of
SOLID LIQUIDITY: With 257.2 days cash on hand. 26.9 times (x) cushion ratio and 189 percent cash to pro forma debt, liquidity metrics exceed Fitch's 'AA' category medians of 254.3 days, 23.4x and 173.6 percent, respectively and provide cushion for timely payment of debt service. Liquidity metrics will be bolstered by approximately
STABLE OPERATING PROFITABILITY: While light for the rating category, operating profitability has been consistent, averaging 2.4 percent since fiscal 2009 and equal to 2.3 percent in fiscal 2013, normalized for non-recurring items.
MODERATE DEBT BURDEN: Partners pro forma debt burden remains moderate with pro forma MADS equal to 2.5 percent of fiscal 2013 revenues. However coverage of pro forma MADS by EBITDA of 3.6x in fiscal 2013 (normalized to exclude non-recurring items) remains light for the rating category but adequate given Partners' overall credit profile.
INCREASED CAPITAL SPENDING: Capital spending is projected to increase materially with a five-year capital budget of roughly
MAINTENANCE OF CURRENT PROFILE: Fitch expects Partners to continue to record consistent operating profitability and to maintain both coverage and liquidity metrics while successfully executing its strategic initiatives.
Partners added the series M-5 bond issuance to its previously rated series M bond issuance. The series M-5 bonds will have the same amortization schedule as the refunded series 2003 D-3 bonds. The refunding is expected to achieve interest rate savings and will decrease Partners' bank risk exposure. Aggregate pro forma MADS will decrease slightly to
Additional information is available at 'fitchratings.com'
--'Nonprofit Hospitals and Health Systems Rating Criteria',
U.S. Nonprofit Hospitals and Health Systems Rating Criteria
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Fitch Ratings has assigned 'AA ' ratings to the following bonds expected to be issued by the