Fitch Ratings has affirmed the "AA-" rating on $130.5 million of series 2009A revenue bonds issued on behalf of Bayhealth Medical Center, a two-hospital system based in Dover, Del., by the Delaware Health Facilities Authority.
The system's strengths were considered for the rating affirmation, including its excellent financial profile and strong market leadership. Bayhealth maintains a dominant position in its primary service area, with a stable market share around 80 percent.
Bayhealth's challenges were also considered for the rating affirmation, such as an ongoing construction project with an estimated total cost of $300 million. Fitch believes Bayhealth has room to absorb significant cash demands and potential new debt associated with the construction project at the "AA-" rating level. However, "material deviations from the budget may lead to negative rating pressure," according to Fitch.
The system's outlook is stable.
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