Fitch Ratings has assigned an "AA-" rating to $151.1 million of series 2015A revenue refunding and improvement bonds, $100 million of series 2015 hospital facilities revenue bonds and $150 million of series 2015C taxable bonds, which are expected to be issued on behalf of Cincinnati-based Mercy Health.
Bond proceeds will be used to fund various capital projects, including patient tower projects at the system's Jewish Hospital and Anderson Hospital, both in Cincinnati. Bond proceeds will also be used to refund a portion of the system's outstanding series 2010 bonds, according to Fitch.
The rating assignment was based on a number of factors, including the system's broad operating platform. The 23-hospital system holds the leading market share in Ohio. The rating assignment was also based on the system's consistent operating profitability.
Mercy Health does face some challenges, which were considered for the rating assignment, such as having an elevated debt burden. The system's pro forma debt burden is elevated with maximum annual debt service equal to 3.4 percent of fiscal 2014 operating revenue.
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