Bangkok--8 Dec--Standard & Poor's
Standard & Poor's Ratings Services revised its outlook to positive from stable and affirmed its 'A+' underlying rating (SPUR) on MultiCare Health System, Wash.'s outstanding debt. At the same time, Standard & Poor's assigned its 'A+' long-term rating to Washington Health Care Facility Authority's $102.590 series 2010A revenue bonds, issued on behalf of the system. Finally, Standard & Poor's affirmed its 'AAA/A-1+' rating on MultiCare's outstanding debt.
The long-term rating is based on the joint support of an irrevocable direct pay letter of credit (LOC) provided by Wells Fargo Bank N.A. (AA/A-1+) and the SPUR of the obligor (A+).
"The positive outlook reflects our view of MultiCare's strong business position and excellent operating performance," said Standard & Poor's credit analyst Geraldine Poon. "We also expect MultiCare will maintain strong operating margins, although there will likely be a dip when the new facility opens."
"Given some relative balance sheet weakness, a rating upgrade in the next two years is contingent upon the successful completion of the Good Samaritan construction, some balance sheet improvement with cash-to-debt improving to more than 100%, continued sound cash flow, and no significant impact from additional competition," Ms. Poon said.
Bond proceeds will refund MultiCare's 1998 bonds.
In addition to a major $400 million investment at the Good Samaritan campus (new tower expected to be complete by early 2011), other planned spending includes continued information technology spending and expansion/renovation/infrastructure plans at MultiCare's existing campuses, as well as routine capital spending needs.
Located in Tacoma, Wash., (AA-) the MultiCare Health System includes three adult hospitals (Tacoma General Hospital, Allenmore Hospital, and Good Samaritan Hospital) and one pediatric hospital (Mary Bridge Children's Hospital) for a total of 818 licensed beds, seven outpatient surgery centers, two multi-specialty medical centers, and seven urgent care centers. In addition to its acute-care facilities, MultiCare has a relatively new outpatient facility in Gig Harbor that opened in mid-2007 and also maintains a medical group of 336 employed physicians.
RELATED RESEARCH
USPF Criteria: "Not-For-Profit Health Care," June 14, 2007
USPF Criteria: "Debt Derivative Profile Scores," March 27, 2006
USPF Criteria: "Municipal Applications For Joint Support Criteria," June 25, 2007
Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and 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. Use the Ratings search box located in the left column.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Geraldine Poon, San Francisco (1) 415-371-5078
Brian T Williamson, Chicago (1) 312-233-7009
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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[email protected]
Americas Customer Service: (1) 212-438-7280
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