Moody's Investors Service has assigned an "A3" rating to Gainesville, Fla.-based UF Health Shands Hospital's $250 million of series 2014 fixed rate bonds and downgraded the rating on the hospital's $381 million of outstanding debt from "A2" to "A3."
The rating downgrade reflects Shands' 60 percent increase in debt associated with the series 2014 bonds. In addition, the hospital's financial performance in fiscal year 2014 marked a downturn. Shands' operating cash flow margin was 8.3 percent at the end of FY 2014, compared to 10.9 percent the previous year.
Although Shands faces some challenges, the hospital's strengths were also considered for the rating assignment and downgrade. The hospital experienced a 6.4 percent increase in admissions in 2014. In addition, Shands' strong relationship with the University of Florida College of Medicine was viewed as a strength for the hospital.
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