Fitch Rates Duke University Health System, North Carolina Revs 'AA'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has assigned a 'AA' rating to the $151.1 million North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. Medical Care Commission 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 (Duke University Hospital Project), series 2006 A & B. In addition, Fitch affirms the 'AA' rating on approximately $435.6 million of outstanding bonds issued on behalf of Duke University Health System Health System. The Rating Outlook is Stable. The series 2006 bonds will be structured as weekly variable-rate 5-year 'index put bonds'. Bond proceeds will be used to fund various capital improvements, repay a bank line of credit and to pay associated costs of issuance. The bonds are expected to be purchased by Citigroup through negotiation during the week of Nov. 13th. The 'AA' rating is supported by Duke University Health System, Inc.'s (DUHS DUHS Duke University Health System DUHS Dow University of Health Sciences (Karachi, Pakistan) DUHS Dowagiac Union High School (Michigan) ) outstanding balance sheet strength and operating profitability, a leading market share position in AAA-rated Durham County Durham County has several possible meanings:
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. Jun. 30, 2006 DUHS posted operating and excess margins of 8.9% and 11%, respectively and marks the sixth consecutive year of improved operating performance. DUHS' unrestricted cash and investment topped $1 billion as a result of strong operating performance and strong investment returns. As of Jun. 30, 2006 DUHS's total cash and investments translate into 260 days cash on hand and 171% of pro-forma long term debt both which exceed Fitch's 2006 'AA' medians 230 and 145%, respectively. Moreover, DUHS' liquidity position in fiscal 2006 was negatively impacted by a one-time transfer to Duke University Medical School of $280 million under the 'Academic Support Transfer Agreement' (for more information see Fitch's press release dated July 14, 2006 'Duke University Health System (NC) 'AA' Rating Unaffected by Academic Support Transfer'). Historical coverage of pro-forma maximum annual debt coverage improved to 7.9 times (x) in fiscal 2006 from 5.6x in the year earlier period. DUHS maintains a dominant market share of 85.3% in Durham County (accounting for 34.2% of total DUHS's discharges in federal fiscal year 2005) and shares a leading market position with UNC (Universal Naming Convention) A standard for identifying servers, printers and other resources in a network, which originated in the Unix community. A UNC path uses double slashes or backslashes to precede the name of the computer. Health Care System of 24.3% in the 11-county region that includes Durham, Orange and Wake counties. DUHS is recognized as one of the leading academic medical centers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and is ranked among the top 10 U.S. hospitals in cardiovascular, cancer and musculoskeletal musculoskeletal /mus·cu·lo·skel·e·tal/ (-skel´e-t'l) pertaining to or comprising the skeleton and muscles. mus·cu·lo·skel·e·tal adj. Relating to or involving the muscles and the skeleton. service lines by U.S. News and World Reports. DUHS benefits from its close relationship with its parent Duke University and its School of Medicine. Credit risks include the increasing competition for patients in Wake County, DUHS' future capital needs and increasing capacity constraints at DUHS' main campus in Durham. DUHS has seen its market share slip slightly in the 11-county Greater Triangle area to 24.3% in federal fiscal year 2005 from 25.2% in 2004. All three competitors are expanding the number of locations throughout the service area. DUHS has budgeted approximately $917 million in future capital needs from fiscal 2007-2009 with a large portion dedicated to 'strategic investments' to expand DUHS' reach in the service area. DUHS has recently moved certain departments, added a clinical evaluation clinical evaluation Medtalk An evaluation of whether a Pt has symptoms of a disease, is responding to treatment, or is having adverse reactions to therapy unit and is expanding its emergency department and operating rooms operating room n. Abbr. OR A room equipped for performing surgical operations. to meet increasing volumes at its main facility, on the Durham campus, where limited open space for expansion exists. Much of the additional capacity would be added by attaching new structures to existing structures, with carefully planned implementation for minimal to no interruption of services. The Stable Rating Outlook reflects DUHS' consistent improvement in operating performance, solid service area demographics and DUHS's strong clinical reputation and close association with Duke University (Duke), its parent. The risks associated with DUHS future capital needs are mitigated by DUHS' strong management practices and by the clinical excellence and reputation of its medical staff and facilities. Based in Durham, NC, DUHS is a large integrated delivery system integrated delivery system Integrated provider Medical practice A coordinated health care system formed by physician groups and hospitals which ↑ efficiency and ↓ redundancy in providing health care; IDSs coordinate delivery of a broad range of health with three hospitals and several operating subsidiaries. The three hospitals consist of: Duke University Hospital (DUH), 965 licensed acute care and specialty beds located in Durham, N.C.; Durham Regional Hospital Durham Regional Hospital (DRH) has been a member of the Duke University Health System family since 1998. The hospital has 369 beds and over 500 physicians on the medical staff, and has a certified Level II Intensive Care Nursery. , 369 licensed acute care beds located in Durham; and Duke Health Raleigh Hospital, 186 licensed acute care beds located in Raleigh. DUH is the flagship hospital and accounted for 70% of DUHS' $1.7 billion operating revenues in fiscal 2006. DUHS covenants to provide to bondholders and the NIRMSIRs annual and quarterly financial disclosure within 180 days and 60 days, respectively. Historical disclosure to Fitch has been excellent in terms of content and timeliness (includes a balance sheet, income and cash flow statement, and utilization statistics). The following issues are affirmed at 'AA': --$107,380,000 North Carolina Medical Care Commission Hospital revenue refunding bonds (Duke University Hospital Project), series 2005A; --$107,380,000 North Carolina Medical Care Commission Hospital revenue refunding bonds (Duke University Hospital Project), series 2005B; --$107,380,000 North Carolina Medical Care Commission Hospital revenue refunding bonds (Duke University Hospital Project), series 2005C; --$20,975,000 North Carolina Medical Care Commission Hospital revenue bonds (Duke University Hospital Project), series 1998B; --$8,990,000 North Carolina Medical Care Commission Hospital revenue bonds (Duke University Hospital Project), series 1998A; --10,114,384 North Carolina Medical Care Commission Hospital revenue bonds (Duke University Hospital Project), series 1996C; --$1,220,000 North Carolina Medical Care Commission Hospital taxable revenue bonds (Duke University Hospital Project), series 1996A; --$28,650,000 North Carolina Medical Care Commission Hospital variable rate revenue bonds (Duke University Hospital Project), series 1993A; --$43,500,000 North Carolina Medical Care Commission Hospital variable rate revenue bonds (Duke University Hospital Project), series 1985B. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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