There's a strong financial outlook for the pending "mega-merger" between Detroit-based Henry Ford Health System and Royal Oak, Mich.-based Beaumont Health System, according to a Detroit Free Press report.
The soon-to-be merged system is expected to have more borrowing clout on Wall Street, according to the report. Given their recent bond ratings, Beaumont and Henry Ford were likely to face more expensive borrowing costs if their ratings fell even slightly, according to the report.
Moody's Investors Service affirmed Henry Ford's "A1" rating in January and said the system had a "stable outlook" for its "continued improvement in operating performance and cash flow." The system's weaknesses, however, included strong competition and weak balance sheet ratios for an "A1" rating.
Moody's affirmed Beaumont's "A1" rating in January as well, noting the system's low Medicaid and bad-debt levels (compared with competing providers), aggressive remediation actions that led to improved cash flow and the system's lead for 27.6 percent of the primary service area market share. Beaumont's weaknesses included weak liquidity for its "A1" rating and a below-average debt-to-revenue ratio of 64 percent, according to the report.
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The soon-to-be merged system is expected to have more borrowing clout on Wall Street, according to the report. Given their recent bond ratings, Beaumont and Henry Ford were likely to face more expensive borrowing costs if their ratings fell even slightly, according to the report.
Moody's Investors Service affirmed Henry Ford's "A1" rating in January and said the system had a "stable outlook" for its "continued improvement in operating performance and cash flow." The system's weaknesses, however, included strong competition and weak balance sheet ratios for an "A1" rating.
Moody's affirmed Beaumont's "A1" rating in January as well, noting the system's low Medicaid and bad-debt levels (compared with competing providers), aggressive remediation actions that led to improved cash flow and the system's lead for 27.6 percent of the primary service area market share. Beaumont's weaknesses included weak liquidity for its "A1" rating and a below-average debt-to-revenue ratio of 64 percent, according to the report.
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Henry Ford Health System, Beaumont Health System Announce MergerRumors Emerge For Potential Henry Ford Hospital, Beaumont Health System Merger
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