Fitch downgrades Baptist’s bonds

by Wally Northway

Published: May 21,2010

Tags: bonds, credit rating, healthcare, investing, stocks and bonds

JACKSON — Fitch Ratings has downgraded Mississippi Baptist Health System’s (MBHS’) $113.9-million Mississippi Hospital Equipment and Facilities Authority revenue bonds, series 2007A, to “BBB+” from “A-.”

The rating outlook is revised to “stable” from “negative.”

Fitch said the downgrade reflects declining profitability and weakening business position. Profitability continues to decline with earnings deteriorating since the end of fiscal year (FY) 2008 as a result of significant inpatient volume declines, mostly due to the loss of several key cardiac physicians. Additionally, the business position is weakening as inpatient admissions declined 4.6 percent in FY 2008 and another 6.1 percent in FY 2009.

Fitch said despite the operating losses, MBHS maintains an excellent cash position.

Rating stability is anticipated at the lower rating level so long as operating losses and moderately high capital plans do not erode MBHS’ strong cash position. Operating earnings are expected to improve as a result of management’s recently enacted cost reduction, utilization improvement, and revenue cycle initiatives. Upcoming capital spending plans of about $200 million for FY 2011-2014 that could pressure liquidity if current operational performance does not improve.

[RSS Feed] [del.icio.us]



To sign up for Mississippi Business Daily Updates, click here.

POST A COMMENT

 

Twang & Tourism: The Country Music Trail

Our annual "Come See Us" magazine offers ideas for spots in Mississippi ranging from golf to culture to history to food. Click the photo for ideas, stories and access to the digital edition of this year's magazine.

Still planning that summer vacation?

Our annual "Come See Us" magazine offers ideas for spots in Mississippi ranging from golf to culture to history to food. Click the photo for ideas, stories and access to the digital edition of this year's magazine.

FOLLOW THE MBJ ON TWITTER

Top Posts & Pages

%d bloggers like this: