As is customary when large bond issues are proposed, financial rating services off opinions.
Fitch has the following comments to make, among others:
- Fitch Rates Centegra Health System & Affiliates, IL Ser 2014A Revs ‘BBB’; Downgrades Rev Bonds (headline)
- Fitch Ratings-Chicago-05 May 2014: Fitch Ratings has assigned a ‘BBB’ rating to approximately $134.7 million series 2014A revenue bonds expected to be issued by the Illinois Finance Authority on behalf of Centegra Health System and Affiliates (Centegra).
- In addition, Fitch downgrades the following revenue bonds to ‘BBB’ from ‘A-‘: –$195.0 million Illinois Finance Authority (Centegra Health System and Affiliates), series 2012
- The Rating Outlook has been revised to Stable from Negative.
Key rating dirvers are listed:
- Elevated debt burden
- Modest profitability…Operating margins of 0.2% in fiscal 2013 and 0.5% through the nine months ended March 31, 2014 are light compared to the ‘BBB’ category median of 1.8%.
- Leading market position, competitive service area…Centegra controls about 43.3% inpatient market share
- Strategic investment strategy…Fitch views Centegra’s proactive and strategic initiatives as a credit positive and will likely prove integral to the success of the new hospital.