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Fitch Assigns 'BB+' IDR to John Fitzgibbon Memorial Hospital (MO); Places on Rating Watch Negative.

New York: Fitch Ratings has assigned a 'BB+' Issuer Default Rating (IDR) to John Fitzgibbon Memorial Hospital (MO) and has placed the IDR and the following bonds rated 'BB+' issued by Saline County Industrial Development Authority, MO on behalf of John Fitzgibbon Memorial Hospital (JFMH) on Rating Watch Negative (RWN):

--$9.9 million health facilities refunding bonds, series 2010.

SECURITY

The bonds are secured by a pledge on gross revenues, a mortgage on certain hospital and nursing home property, and a debt service reserve fund.

KEY RATING DRIVERS

DIFFICULTY WITH AUDIT: JFMH is in the process of converting the Electronic Accounting (EA) system and the Electronic Medical Record (EMR) system utilized by the Organization which began in the fall of 2017, due to this data has been delayed. The RWN reflects additional financial weakness as indicated from the limited amount of data that is available at this time. Management expects year-end (April) audited financial statements to be available at the end of October 2018.

RATING SENSITIVITIES

RESOLUTION OF THE RATING WATCH: Fitch expects to resolve the Negative Rating Watch within the next six months when more data and understanding of fiscal-year 2018 is made available. JFMH is currently in the process of completing its 2018 audited financial statements and interim statements, upon completion, Fitch will spend more time discussing fiscal 2018 with JFMH. JFMH may be downgraded if JFMH's 2018 consolidated financial statements show a significant deterioration in the group's credit profile and/or indicate material weakness in operations and liquidity.

CREDIT PROFILE

JFMH is a 60-licensed-bed hospital located in Saline County, MO, approximately 80 miles east of Kansas City. Operations also include a 99-bed skilled nursing facility and several rural health clinics. Total revenues in fiscal 2017 were $55.3 million. Fitch reviews and cites consolidated financial data, and the consolidated entity currently comprises the obligated group.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Dec 19, 2018
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