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MIAMI-Miami Children's Hospital, a 268-bed, 50-year-old landmark medical facility, has earned an A-rating on the Miami-Dade County Health Facilities Authority's series 2006 and 2001A bonds. Standard & Poor's posted the high rating because of the hospital's strong financial profile.
"A higher rating can be achieved if the hospital is successful at achieving its strategic objectives, including the current capital projects, while improving coverage and leverage ratios," says S&P credit analyst Stephen Infranco.
He adds, the rating "specifically reflects a strong business position in pediatric healthcare, evidenced by the hospital's leading and growing market share in its primary service area, a long history of steady business volume growth, and its niche as the only specialty hospital for children in South Florida." Pediatric units at Jackson Memorial Hospital and Baptist Hospital are the only competition for Miami Children's Hospital.
The analyst also notes the hospital's "favorable" operating results in fiscals 2004 and 2005 and its strong operational liquidity with 226 days' cash on hand at fiscal year-end 2005. "Although the ratio of cash to pro forma is weaker, it's still adequate for the rating at 73%," Infranco points out.
The series 2006 bonds will be used to refund existing debt and fund various capital projects, including the addition of 64 beds, an emergency department expansion, renovation and expansion of high-volume clinical areas, the construction of an 800-space parking garage, and the expansion and modernization of the hospital's energy center.
The stable outlook ranking "reflects the expectation that MCH will maintain its leading business position while sustaining positive operations and cash flow to support the increased carrying charges of the additional debt," says the analyst. The current project and capital plan is also expected to allow MCH to "alleviate capacity constraints and leverage its dominant business position to enhance market share and cash flow."
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