Monongalia Health System, WV, Series 2005A & 2008A Ratings Raised; Series 2011 Assigned 'A-' Rating
CHICAGO (Standard & Poor's) March 3, 2011--Standard & Poor's Ratings Services raised its long-term rating to 'A-' from 'BBB+' on the Monongalia County Building Commission, W.Va's series 2005A revenue bonds and raised its underlying rating (SPUR) to 'A-' from 'BBB+' on the commission's series 2008A revenue bonds. Standard & Poor's also assigned its 'A-' long-term rating to the commission's $26.7 million series 2011 refunding revenue bonds. All bonds were issued for Monongalia Health System (MHS). The outlook on all ratings is stable. "The rating action reflects improved liquidity and a more conservative debt portfolio after the debt issuance," said Standard & Poor's credit analyst Avanti Paul. The 'A-' ratings further reflect MHS':
- Strong business position in Monongalia, Preston, and Marion counties, with MHS capturing 33% of the market while competing with the state's flagship academic center;
- Modest volume growth supported by physician recruitment in key service areas;
- Consistently healthy operating margin that has improved to a strong 4.4% for the first seven months of fiscal 2011 compared with 3.1% in fiscal 2010;
- Strong cash flow generation with an EBIDA margin of 13% in fiscal 2010 and 19% in fiscal 2011 to date; and
- Improved liquidity, with a solid 196 days' cash on hand and manageable expected capital needs.
The series 2011 fixed-rate bonds will refund $11.3 million of the $46.9 million series 2008A variable-rate bonds and will fully refund $12.5 million of the unrated series 2005C variable-rate bonds. The stable outlook reflects our expectation that MHS' operating levels will remain at year-to-date levels because of its strong business position, recent capital expansions, and physician recruitment in key service areas. MHS is the parent company and forms the obligated group along with Monongalia County General Hospital and Mon Elder Services, a senior living facility with 90 independent-living units and 40 assisted-living beds. RELATED CRITERIA AND RESEARCH
- USPF Criteria: Not-For-Profit Health Care, June 14, 2007
- Criteria: Methodology And Assumptions: Approach To Evaluating Letter Of Credit-Supported Debt, July 6, 2009
- USPF Criteria: Municipal Applications For Joint Support Criteria, June 25, 2007
- Criteria: Joint Support Criteria Update, April 22, 2009
- USPF Criteria: Municipal Swaps, June 27, 2007
- USPF Criteria: Debt Derivative Profile Scores, March 27, 2006
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.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.
| Primary Credit Analyst: | Avanti Paul, Chicago 312-233-7061; avanti_paul@standardandpoors.com |
| Secondary Contact: | Liz Sweeney, New York (1) 212-438-2102; liz_sweeney@standardandpoors.com |
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