Fitch Rates Abington Memorial Hospital 'PA' $145MM Bonds 'A-'.Business Editors NEW YORK--(BUSINESS WIRE)--Oct. 1, 2002 Fitch has assigned an 'A-' rating on the approximately $145,000,000 Montgomery County Montgomery County may refer to:
Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. and Health Authority (Pennsylvania) Hospital Revenue Bonds Hospital revenue bond A bond issued to finance construction of a hospital by a municipal or state agency. hospital revenue bond Tax-exempt debt issued by a city, county, state, or hospital authority with debt service guaranteed by hospital , Series A of 2002, Abington Memorial Hospital Obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. Group. In addition, Fitch has placed an underlying rating of 'A-' on Abington Memorial Hospital's (AMH AMH Abington Memorial Hospital (Abington, PA) AMH Anti-Müllerian Hormone AMH Australian Medicines Handbook AMH Automated Material Handling AMH Aviation Structural Mechanic (Hydraulics) US Navy Rating ) outstanding debt issues, listed below. Total outstanding debt after this issuance will be approximately $317 million. Bond proceeds will fund the construction of a five story building addition and parking garage, fund capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. , establish a debt service reserve fund, and pay costs of issuance. The bonds are expected to sell the week of October 7 through negotiation by Salomon Smith Barney. The 'A-' rating is based on AMH's strong liquidity, good market position and solid volume growth. AMH's liquidity position is strong in relation to expenses evidenced by 245 days cash on hand at June 30, 2002, well above Fitch's 'A' median of 160.3 days. Annual cash flow of approximately $50 million has led to a 47% increase in unrestricted cash and investments since fiscal 1999 while operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. have increased 31.6% over the same period. AMH has the leading market share of 53% in its favorable primary service area characterized by above average wealth levels. The next closest competitor, Holy Redeemer Hospital, captures only 11% of discharges. Utilization remains strong at AMH due to the demographic mix (high percentage of elderly population and young families) which has led to capacity constraints. Admissions and outpatient visits have increased 16.8% and 18.7%, respectively, since 1999, well above state averages. The main credit concerns include AMH's high debt burden and competitive marketplace. With this bond issuance, AMH's debt burden increases significantly and is exhibited by low pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma MADS debt service coverage of 2.1 times (x) in fiscal 2002. All debt measures compare unfavorably to Fitch's 'A' medians with MADS equal to 5.8% of total operating revenues and debt-to-EBITDA of 6.5x, both almost double the Fitch 'A' median. Fitch believes the large debt burden will become less of a concern in the mid term as AMH's new project begins to generate additional cash flow. Outmigration is a risk as AMH's secondary service area is fairly competitive with several community providers as well as high end tertiary centers located in nearby Philadelphia. However, many hospitals have affiliated with larger systems and AMH remains one of the few independent hospitals in the Philadelphia metropolitan region. Although the competitive landscape is a concern, Fitch believes AMH maintains a stronghold in its community as demonstrated by its market share and strong community and philanthropic support. AMH recently raised $20 million for a nursing initiative campaign to provide scholarships and other benefits to nursing students. Fitch's Outlook is Stable. AMH is expected to maintain its strong liquidity position and improve its debt service coverage over the near term. Fitch views AMH's disclosure effort to bondholders as adequate with interim quarterly financial statements for the first three quarters, audited financial statements within 180 days of fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. , and notification of any material events. AMH is a 484 staffed bed community hospital providing a wide range of acute care services including cardiac surgery, Level III NICU NICU abbr. neonatal intensive-care unit , and Level II trauma center In the United States a Level II trauma center provides emergency medicine to trauma patients. A Level II trauma center works in collaboration with a Level I trauma center. It provides comprehensive trauma care and supplements the clinical expertise of a Level I institution. . AMH is located in Abington, PA, approximately 14 miles from Philadelphia. Total operating revenue in fiscal 2002 was $397 million. Outstanding debt: $90,750,000 Montgomery County Higher Education and Health Authority (Pennsylvania) Hospital Revenue Bonds, Series A of 1998, Abington Memorial Hospital 'A-'(1); $45,030,000 Montgomery County Higher Education and Health Authority (Pennsylvania) Hospital Revenue Bonds, Series A of 1994, Abington Memorial Hospital 'A-'(1); $36,025,000 Montgomery County Higher Education and Health Authority (Pennsylvania) Hospital Revenue Bonds, Series A of 1993, Abington Memorial Hospital 'A-'(1). (1)This is an underlying rating. The bonds are insured by Ambac, whose insurer financial strength is rated 'AAA' by Fitch. |
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