Moody's Investors Service has affirmed the "A1" ratings assigned to Walnut Creek, Calif.-based John Muir Health's bonds issued through the California Statewide Community Development Authority.
Here are four things to know about the rating action and JMH's outlook.
1. The rating affirmation applies to approximately $390 million of rated debt.
2. The rating affirmation was based on a number of factors, including JMH's large size, strong balance sheet measures, good payer mix and location in demographically favorable markets in the San Francisco Bay Area, according to Moody's.
3. JMH also faces challenges, which were considered for the rating affirmation, such as a highly competitive market and strategic growth initiatives by JMH requiring capital and other investments in order to grow. Additionally, the system's financial performance has been weaker and uneven in recent years amid very low revenue growth, Moody's said.
4. JMH's outlook is stable, which reflects Moody's expectation "that JMH will maintain operating performance at levels above what was achieved in 2013 and the
first three quarters of 2014, and that the organization will not materially increase debt over the near term." The stable outlook further incorporates Moody's expectation "that capital spending will be managed within cash flow."
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