The Rating Outlook is Stable.
The bonds are secured by a pledge of Beebe's gross receipts and a mortgage on its principal facilities.
KEY RATING DRIVERS
GOOD MARKET POSITION: Beebe enjoys a stable market share in the low 60% range, which is supported by the continued expansion of its ambulatory presence and growth of its Beebe Physician Network (BPN).
2014 INTERIM PERIOD OPERATING LOSS: After generating operating gain of
IMPROVED LIQUIDITY: Liquidity was boosted by the
MANAGEABLE DEBT LOAD: Beebe's debt load is manageable despite the addition of new money in the 2014 transaction, which only increased MADS by
RETURN TO OPERATING PROFITABILITY: Beebe's return to operating profitability, while maintaining improved liquidity, could result in positive rating pressure.
GOOD MARKET POSITION
Beebe's inpatient admissions increased by 4.5% in 2013 and inpatient volume continues to be strong through the third quarter of 2014 with a 5.8% increase over the prior year period. The growth is supported by the growth of BPN, as well as the expansion of its ambulatory coverage, particularly in the secondary service area. Beebe responded to the increasing competition for the ambulatory market share by opening three ambulatory locations (
2014 INTERIM PERIOD OPERATING LOSS
Fiscal 2013 was the first year after the final settlement of the Bradley case and the absence of legal expenses, coupled with good volumes, produced gain from operations of
RECENTLY COMPLETED TRANSACTION
MANAGEABLE DEBT LOAD
Despite the increase in debt from the new money in the 2014 transactions, Fitch views Beebe's debt load as still moderate. Coverage of MADS by EBITDA was a 3.4x in fiscal 2013, but was lower at 2.9x though the 2014 interim period, though still close to the 'BBB' category median of 3.1x. As pro forma MADS is only slightly higher, MADS as a percent of revenues remains moderate at 2.2%, compared to the 'BBB' category median of 3.5%. Capital plans include the construction of a school of nursing. However, the majority of the approximately
Beebe covenants to disclose annual audited financial statements and management discussion and analysis as well as quarterly financial statements including balance sheet, income statement, and utilization statistics.
Additional information is available at 'www.fitchratings.com'.
--'Revenue-Supported Rating Criteria' (
--'Nonprofit Hospitals and Health Systems Rating Criteria'(
Revenue-Supported Rating Criteria
U.S. Nonprofit Hospitals and Health Systems Rating Criteria
Source: Fitch Ratings
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