Moodys.com
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

Terms of One-Time Website Use

 

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

 

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

 

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

 

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's assigns Aa3 to Johns Hopkins Health System's $242M Ser. 2013C; Outlook stable

02 Aug 2013

System will have $1.58B rated debt

New York, August 02, 2013 --

Moody's Rating

Issue: Series 2013C Fixed Rate Revenue Bonds; Rating: Aa3; Sale Amount: $242,000,000; Expected Sale Date: 08-13-2013; Rating Description: Revenue: Other

Opinion

Moody's Investors Service has assigned an Aa3 rating to Johns Hopkins Health System's (JHHS) $242.0 million of Series 2013C fixed rate bonds, to be issued by the Maryland Health and Higher Educational Facilities Authority. The rating outlook is stable. In April 2013, with our last full review of JHHS, we had incorporated JHHS's current bond offering to be used to finance capital projects at Sibley Memorial Hospital and Johns Hopkins Bayview Medical Center (which represents $200 million of net new debt after cash redeeming $40 million of Sibley debt in April). Sibley Memorial Hospital's A2 bond rating remains under review for upgrade pending its inclusion in the Obligated Group of JHHS, which is anticipated to occur on August 28 with the closing of the JHHS 2013C bond issuance. Should that occur and the Sibley 2009 Bonds be made parity to the obligations of JHHS, there will be upward credit pressure. In the event that this transaction does not occur, Sibley's bond rating would be considered under its own underlying credit fundamentals. Giving effect to the current financings including the concurrent inclusion of SMH into the JHHS Obligated Group, JHHS will have approximately $1.58 billion of rated debt that will carry a pledge of the JHHS Obligated Group and an aggregate $1.73 billion of System debt outstanding.

Unless noted otherwise, the figures below present data for The Johns Hopkins Health System Corporation and Affiliates (JHHSC). JHHSC is the sole member of The Johns Hopkins Hospital (JHH), an academic medical center, Johns Hopkins Bayview Medical Center, Inc. (JHBMC), a community based acute care teaching hospital and long-term care facility, Howard County General Hospital, Inc. (HCGH), a community based hospital, Suburban Hospital, Inc. (SHI), a community based hospital, Sibley Memorial Hospital (SMH), a community based hospital, All Children's' Hospital, Inc. (ACH), an academic children's hospital, and other non-acute care affiliates.

SUMMARY RATING RATIONALE:

The Aa3 rating is based on Johns Hopkins prominent clinical reputation and strong patient demand for high acuity tertiary and quaternary services, highly integrated relationship with Johns Hopkins University, well positioned network of community hospitals, trend of healthy financial performance, and a solid and generally growing investment portfolio. The System's challenges include a competitive and consolidating healthcare market, digestion of recent System growth which includes additional borrowings, moderate margins compared with similarly-rated peers, and pension funding needs. The stable rating outlook is based on our belief that JHHS will be able to continue to translate its premiere reputation and solid market strategies into healthy cash flow, more than adequately covering increasing debt service requirements. Upward rating pressure is likely as the System digests recent strategic initiatives and capital investment in System affiliates.

STRENGTHS

*Consistently healthy and generally strengthening operating performance for the consolidated health system; consolidated operating and operating cash flow margins in FY 2012 of 2.7% and 8.6%, respectively (investment income reclassified to non operating income). Through nine months of FY 2013 (period ending March 31, 2013) the system is generating margins of 1.8% and 8.5%, respectively, with operating income excluding a litigation settlement of $25.0 million and reclassifying investment income of $36.8 million to non operating income. Operations provide for an adequate 5.4 times maximum annual debt service coverage, as compared with Aa3 median of 5.6 times.

*Same store revenue growth remains healthy reflecting the System's increasing demand for both inpatient and outpatient services and increased rates for case mix (acuity) and capital under Maryland's all payer system.

*With most significant capital projects completed we see liquidity growth and absorption of leverage. Absolute liquidity of over $2.5 billion at FYE 2012 (including unrestricted assets held by JHH Endowment Fund) provides for a healthy 217 days cash on hand (Aa3 median is 236 days).

*Preeminent reputation for high-end clinical services and wide patient draw regionally, nationally and internationally, supporting future growth; System captured nearly 117,000 admissions in FY 2012

*The Health System's close relationship with legally separate Johns Hopkins University (JHU, rated Aa2), under the common framework of Johns Hopkins Medicine, brings an informal commitment to support the operations of JHH, the system's major academic medical center

*Strategic momentum that has resulted in additional market capture and generally increasing inpatient demand trends. System's strategic growth appears to be largely accretive to System's financial profile

*Completion of JHH total campus redevelopment and the new tower at HCGH as well as ongoing construction at JHBMC concurrent with System's notable financial profile strengthening reflects management's tangible success in leveraging system resources (cashflow, debt and philanthropy) while establishing a more disciplined financial framework

*Certificate of Need (CON) limits competitive encroachment while Maryland's all payer rate environment provides a high degree of predictability to operating performance

CHALLENGES

*Revenue growth will be constrained as a result of Maryland's all payer environment; though rates for JHH incorporate cost recovery for the campus redevelopment plan

*Though currently modest relative to total System operations, potential expansion of international operations (currently $193 million of annual downstream revenue to JHH) could distract management and or dilute system resources in the future

*Giving effect to current borrowing, and borrowings completed in Spring of 2013, leverage remains very manageable, though certain measures are elevated relative to Aa3 peers, though we anticipated the tempering at the time of our last review. Pro-forma cash-to-debt declines to 146%, as compared with Aa3 median of 186%. Similarly, pro-forma debt to cash-flow rises to 3.6 times and debt to revenue rises to 37.8%, both measures are unfavorable to Aa3 medians of 2.6 times and 31.3%, respectively

*Pension plan funding at 63% relative to a projected benefit obligation (PBO) of $1.47 billion at fiscal yearend (FYE) 2012 will require large contributions; comprehensive liabilities including pension and operating leases elevate all measures of comprehensive leverage

*Still developing issue which may carry litigation and reputational risk related to the ongoing investigation of illegal acts committed by a former JHHS physician who illegally and without the knowledge of Johns Hopkins, photographed his patients and possibly others with his personal photographic and video equipment and stored those images electronically. This occurred for an unknown period of time. As soon as Johns Hopkins became aware of this, the physician was prohibited from any further patient contact, his employment was terminated and this activity was reported to the Baltimore City Police Department ("BCPD"). The matter continues to be under investigation by the BCPD and the Federal Bureau of Investigation ("FBI"); management reports JHHS has fully cooperated with these parties. Several lawsuits have been filed naming as defendants JHHS and several of its affiliates asserting claims for damages and injunctive relief. The lawsuits seek class action treatment for all patients seen by the physician since he began work at JHHS in 1988. The total class size is unknown, but JHHS estimates that the physician had seen approximately 9,000 patients since 2000. In order to provide for orderly resolution of the claims, Johns Hopkins has agreed, with lead counsel for the plaintiff class, to seek jointly conditional certification of the class for settlement purposes. Conditional certification of the class is subject to court approval. JHHS and its affiliates will reserve the right to withdraw their agreement to conditional class certification in the event that the outcome of the class action process does not result in a settlement acceptable to Johns Hopkins. JHHS and its affiliates maintain both primary and excess medical malpractice insurance coverage for 2013 (the policy triggered by the matter) on a claims made basis. JHHS and affiliates intend to assert both the statutory and common law doctrines of charitable immunity to the extent any liability may exceed the amount of available insurance. The ongoing investigation, and litigation, raises financial and reputational risks and diverts senior management's efforts away from other operating activities. Protracted negative publicity about the incidents can result in reputational damage that adversely impacts demand and philanthropy. Financial risks involve paying damages to plaintiffs that either exceed or fall outside the coverage provided by the available insurance or damages that the Maryland courts limit or find inapplicable under the statutory and common law charitable immunity doctrines. Additional financial risks involve paying associated legal fees in addition to public relations expenditures.

OUTLOOK

The stable rating outlook is based on our belief that JHHS will be able to continue to translate its premiere reputation and solid market strategies into healthy cash flow, more than adequately covering increasing debt service requirements. Upward rating pressure is likely as the System digests recent strategic initiatives and capital investment in System affiliates.

WHAT COULD MAKE THE RATING GO UP

Upward rating pressure is likely as the System digests recent strategic initiatives and capital investment in System affiliates. Further growth in unrestricted cash, successful absorption of near term capital projects and related borrowings, and sustained operating momentum will be considered.

WHAT COULD MAKE THE RATING GO DOWN

Rating pressure would follow significantly greater than expected increase in debt, unexpected and prolonged decline in operating performance that results in declining cash-flow or a material weakening of the balance sheet cushion. Finally, should the resolution of the ongoing investigation of illegal acts committed by a former JHHS physician (see discussion above) have significant negative financial impact on the System, downward rating pressure could follow.

PRINCIPAL METHODOLOGY USED

The principal methodology used in this rating was Not-for-Profit Healthcare Rating Methodology published in March 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Beth I. Wexler
VP - Senior Credit Officer
Public Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Kimberly S Tuby
VP - Senior Credit Officer
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's assigns Aa3 to Johns Hopkins Health System's $242M Ser. 2013C; Outlook stable
No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH  CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND  OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES  ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR  PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​​​
Moodys.com