Fitch to Review Ascension Health's Rtg & Merger with Carondolet Health.Business Editors 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. plans to review its long-term rating on Ascension Ascension, in Christianity Ascension, name usually given to the departure of Jesus from earth as related in the Gospels according to Mark (16) and Luke (24) and in Acts 1.1–11. Health's approximately $3.2 billion in outstanding debt in conjunction with Ascension's recently announced merger with Carondolet Health, a nine-hospital system that, like Ascension, is based in St. Louis, MO. Fitch does not rate Carondolet's approximately $260 million long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . The planned merger, which has been formalized for·mal·ize tr.v. for·mal·ized, for·mal·iz·ing, for·mal·iz·es 1. To give a definite form or shape to. 2. a. To make formal. b. by the signing of a letter of intent, is expected to close by August 1. Ascension does not plan to pay cash for Carondolet's assets. The deal will bring to Ascension's credit profile eight hospitals (the ninth located in California will not be part of the transaction), the $260 million in long-term debt, about $236 million in unrestricted liquidity, and challenging operations as Carondolet lost $71.6 million from operations on total operating revenues of about $2 billion over the past two fiscal years (June 30 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. ). However, more than half of Carondolet's $41.6 million loss from operations in fiscal 2001 came from its California operations. Fitch most recently affirmed Ascension's 'AA' long-term rating in November 2001 with its $582.3 million series 2001 bond financing. Ascension is expected issue another $350 million in bonds (not related to the Carondolet deal) later this summer. It appears that Ascension's credit profile will remain materially unchanged with the Carondolet merger, as Ascension's large balance sheet of about $3 billion in unrestricted cash and investments and its annual operating revenue of about $8 billion can adequately incorporate the additional debt (which is mitigated by Carondolet's cash) and unprofitable operations of Carondolet. Fitch will need to further analyze the strategic and operational fit of the Carondolet entities within Ascension to make a final determination on the merger's merits. Ascension Health Ascension Health is a non-profit company that operates a network of hospitals and related health facilities in the United States. It is the nation's largest Catholic and largest non-profit health system[1]. , the nation's largest not-for-profit health care system with annual revenue of $8 billion, consists of 57 health corporations (55 acute-care hospitals) in 12 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . The merger with Carondolet Health will bring an additional eight acute-care hospitals located in six states in markets where Ascension does not have a presence. |
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