Moody's Investors Service has affirmed the "Baa3" rating assigned to Shands Jacksonville (Fla.) Medical Center's $123 million of outstanding debt and affirmed its stable outlook.
The rating affirmation was supported by a number of factors, including SJMC's improving financial performance in FY 2014 after its turnaround in FY 2013. Despite having relatively weak margin medians in FY 2014, Moody's expects SJMC's earnings to increase with the addition of the North Jacksonville facility. UF Health Jacksonville North, which is currently under construction, will be a 92-bed, full-service community hospital including an emergency department and ancillary services once completed.
The rating affirmation was also supported by the medical center's close alignment with the University of Florida in Gainesville, shared services with Shands Teaching Hospital and Clinics (also in Gainesville) and its location in a city with a diversified economy and declining unemployment rate.
SJMC also faces some challenges, which were considered for the rating affirmation, such as its liquidity, which decreased in FY 2014 to $94 million from $109 million in FY 2013, and its reliance on city and state funding to help offset uncompensated care and Medicaid costs.
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