Moody's Investors Service has assigned an "A2" rating to $13.5 million of series 2015 hospital revenue bonds issued on behalf of Hendrick Medical Center in Abilene, Texas.
The rating is attributed to an increase in the hospital's revenue, which is partially due to an increase in patient volumes. The rating is also supported by Hendrick Medical Center's healthy operating cash flow that continues to be in the double digits and "very good debt service coverage metrics," according to Moody's.
Hendrick Medical Center maintains a leading 59 percent market share in its primary service area. For fiscal year 2014, which ended in August, it had 272 days' cash on hand, as well as a cash-to-direct debt ratio of 152 percent, according to Moody's.
However, Hendrick Medical Center also faces possible challenges such as a budgeted decline in performance for fiscal year 2015, continuing to be highly dependent on government reimbursement (61 percent of gross revenues) and self-pay (12 percent), according to Moody's.
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