Bangkok--1 Apr--Standard & Poor's
Standard & Poor's Ratings Services revised its outlook to stable from positive and affirmed its 'BBB+' long-term rating and underlying rating (SPUR) on the bonds issued by the State of Hawaii and the Hawaii State Department of Budget and Finance on behalf of Hawaii Pacific Health (HPH).
"The outlook revision primarily reflects balance sheet deterioration related to HPH's swap portfolio and the weak investment markets," said Standard & Poor's credit analyst Geraldine Poon. "Although an imminent variable rate demand bond issuance backed by a letter of credit that will refinance the 2005A series is expected to result in a $44 million return of collateral, pro forma days' cash on hand has eroded. Nevertheless, HPH, continues to have sound credit fundamentals, with a good business position and improving operating performance."
HPH had the dominant market position in Oahu as the state's largest health system, with approximately 34% market share on the island, based on 2007 patient discharges. The Queen's Medical Center, HPH's major competitor, is at 26%, and Kaiser Foundation Hospital is at 14%. HPH currently staffs a total of 543 beds at four hospitals -- Kapi'olani Medical Center for Women and Children, Kapi'olani Medical Center at Pali Momi, Straub Clinic & Hospital on Oahu, and Wilcox Memorial Hospital on Kauai. In addition, HPH has three medical groups: Kapi'olani Medical Specialists, Kauai Medical Clinic, and the Straub Clinic.
HPH also has a master facility plan, and management plans to issue approximately $98 million of new debt to fund the first phase in 2011. Another issuance of $98 million is currently planned for 2013. The estimated cost over seven years is $140 million and management plans to finance it through a combination of cash flow, reserves, philanthropy, and tax-exempt bonds.
Complete ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Geraldine Poon, San Francisco (1) 415-371-5078
Emily Wong, New York (1) 212-438-6489
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]