Pittsburgh-based UPMC plans to sell $350 million of series 2014A bonds and $50 million of series 2014B bonds to fund capital expenditures and refinance existing debt, according to an UPMC investor presentation on Sept. 15.
The series 2014A bonds will be issued by the Pennsylvania Economic Development Financing Authority and the 2014B bonds will be issued by the Monroeville Finance Authority.
Fitch Ratings assigned an "AA-" rating to the bonds, which was supported by UPMC's dominant market share in western
Fitch also maintained UPMC's negative outlook based on the heightened competitive environment for managed care in western
UPMC and Highmark have been embroiled in a longstanding turf war within the
After the insurer announced the acquisition, UPMC — which operates its own insurance arm — said it would not renew its contract with Highmark, saying the contract would benefit a direct rival.
After months of negotiations, Pennsylvania Governor Tom Corbett (R) announced UPMC and Highmark had entered into a five-year transition agreement that would allow Highmark enrollees to be covered by their out-of-network coverage rate, though UPMC services provided outside the greater Pittsburgh area will remain in-network for Highmark customers.
However, lawmakers felt there were many specialty care, emergency care and continuity of care issues that were far from resolved in the agreement, and Highmark's post-UPMC transition plan, which was released this month, provided no further guidance.
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