Moody's Investors Service has assigned "A2" ratings to Fort Myers, Fla.-based Lee Memorial Health System's proposed $280.3 million of series 2015A fixed rate revenue and refunding bonds.
Here are five things to know about the bonds, the rating assignment and the health system's outlook:
1. The bonds are expected to mature in 2045.
2. The "A2" rating was supported by a number of factors, including Lee Memorial's distinctly leading inpatient market share in a growing favorable service area with strong operating performance in fiscal year 2014 and healthy liquidity balances, according to Moody's.
3. These positive attributes are offset by some challenges, such as the health system's high debt load with $100 million of additional debt for construction of a children's hospital at the HealthPark campus and unresolved challenges with Medicaid and Low Income Pool funding that may have a material negative effect on performance.
4. The health system's outlook remains stable.
5. The stable outlook is based on Moody's expectation that "with (Lee Memorial's) distinctly leading market position and strong operating performance lead by management initiatives and volume growth, the system will be able to digest the potential Medicaid cuts and absorb the increase in debt."
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