Adventist Health’s ‘A’ Rating Affirmed

Adventist Health’s ‘A’ rating has been affirmed with a stable outlook from both Standard & Poor’s Rating Services and Fitch Ratings. The rating affirmations are for $90 million in fixed-rate revenue bonds, series 2009A; and $30 million variable-rate revenue bonds, series 2009B.

According to Fitch, the ‘A’ rating reflects Adventist Health’s improving operating results, system diversity, adequate debt coverage and stable investment returns. Standard & Poor’s further recognized the health system for its good risk dispersion, willingness to divest underperformers and the near completion of the system’s sizable capital plan.

While it was noted that Adventist Health’s operating margin is slim for a system of its size, Fitch’s stable outlook is based on the expectation that Adventist Health will maintain or improve operating performance as new facility renovations and expansions are completed.

Standard & Poor’s also anticipates that the health system’s performance will remain stable and that capital expenditures will decline to a more “normal” level as seismic projects conclude.

Adventist Health’s revenue exceeded $2 billion in 2008 for the first time, and operating income has steadily improved over the past three years. These increases come as a result of volume increases at facilities with completed renovations and expansions, and ongoing initiatives in quality, information technology and productivity.

“The improved operations and the ‘A’ rating affirmations are a testament to the hard work and good stewardship throughout our hospitals,” stated Bob Carmen, president and CEO of Adventist Health. “Across our system we’ve focused on improving operations and efficiencies. As a result we’re seeing a lot of positive changes to our bottom line, which are reflected in our stable outlook from both S&P and Fitch Ratings.”