Moody's Investors Service assigned its "Aa2" rating to Cleveland Clinic Health System's proposed $631 million series 2017A tax-exempt bonds and $164 million taxable series 2017B revenue refunding bonds, expected to sell Aug. 8. The bonds will mature in 2043 and will be issued by the Ohio Higher Educational Facility Commission.
In addition, Moody's affirmed the "Aa2," "Aa2/VMIG 1" and "P-1" ratings on Cleveland Clinic's variable rate bonds, affecting $3 billion of debt.
The "Aa2" assignment is a result of several factors, including Cleveland Clinic's strong liquidity and cash flow, as well as proper execution of large capital projects and ability to fundraise.
The short-term rating is a result of the health system's strong liquidity metrics to support and ensure timely payments on maturing commercial papers and unassigned bonds.
The outlook is stable, reflecting Moody's expectation that Cleveland Clinic will utilize multiple strategies to navigate debt risk and maintain improved operating margins to support the higher debt level.