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 University of Pittsburgh Medical Center's aggregate $225.5M Ser. 2013; Outlook stable

13 Sep 2013

System will have $3.0B of rated debt

New York, September 13, 2013 --

Moody's Rating

Issue: Fixed Rate, Series 2013A; Rating: Aa3; Sale Amount: $125,000,000; Expected Sale Date: 09/23/2013; Rating Description: Revenue: Other

Issue: Fixed Rate, Series 2013B; Rating: Aa3; Sale Amount: $100,540,000; Expected Sale Date: 09/23/2013; Rating Description: Revenue: Other

Opinion

Moody's Investors Service has assigned Aa3 ratings to the University of Pittsburgh Medical Center's (UPMC) $125.0 million of Series 2013A fixed rate bonds to be issued through the Pennsylvania Economic Development Financing Authority and to $100.54 million of Series 2013B fixed rate bonds to be issued through the Monroeville Finance Authority. The rating outlook is stable. In June 2013, with our last full review of UPMC, we had incorporated UPMC's current bond offering to be used to finance capital projects, refund outstanding UPMC obligations and to refund the obligations of recently acquired Altoona Regional Health System (Altoona), in Altoona Pennsylvania. However, if the refunding of Altoona's bonds is not economical, Altoona bondholders will benefit from parity status to the security of the obligations of UPMC, coincident to the July 1, 2013 acquisition. Altoona obligations which are parity to UPMC's obligations, effective July 1, 2013, are Series 1998A and 2009, issued through Blair County Hospital Authority; both series are expected to carry UPMC's Aa3 rating.

Giving effect to the current financings including the concurrent inclusion of Altoona into the UPMC Obligated Group, UPMC will have approximately $3.0 billion of rated debt that will carry a pledge of the Obligated Group and an aggregate $3.4 billion of System debt outstanding.

SUMMARY RATINGS RATIONALE: The Aa3 rating continues to reflect UPMC's leading and growing market position in Western Pennsylvania, strong patient demand, preeminent clinical reputation rooted in tertiary and quaternary clinical campuses throughout the greater Pittsburgh area and a large network of well-positioned community hospitals throughout western Pennsylvania, and a long track record of effectively addressing operating challenges. These strengths compensate for a weak regional economy and higher leverage than is typical for the rating category including material pension funding requirements. The stable rating outlook, which was revised from positive in June 2013, reflects a heightened level of discord in an acrimonious operating environment that is unusually fierce and now includes the overhang of litigation filed by the City of Pittsburgh, very recent pressure on already modest operating performance that suggests margins will thin at a time when leverage is increasing. As operations temper and fixed requirements on cash-flow increase with additional debt, our long-standing concern that UPMC's investments are measurably less liquid than comparably rated peers is exacerbated, although UPMC has recently changed its target asset allocation to provide for an increae in liquid investments over the next 18 months.

STRENGTHS

*Preeminent clinical reputation and wide patient draw regionally and nationally, supporting future growth and compensating for stagnant population trends in the Pittsburgh area; unrivaled business platform in 29-county service area capturing 41% market share and a dominant 60% market share of Allegheny County; revenue was nearly $10.2 billion in FY 2013 (excluding Altoona). UPMC is both the largest non-governmental employer and largest healthcare system in the Commonwealth

*UPMC's tightly managed and integrated network of more than 20 hospitals, insurance services and physicians is the platform for substantial patient demand with over 202,700 inpatient admissions and over 61,500 observation visits system wide in FY 2013; a business position that remains well secured by the geographic diversity of its venues. Addition of the Altoona market on July 1 will broaden and strengthen UPMC's geographic reach

*Unrestricted cash and investments have strengthened measurably to nearly $3.5 billion, as of June 30, 2013; investments are highly diversified across asset classes and managers

*Debt structure risks are very manageable; pro-forma debt is approximately 82% fixed rate and swap exposure is modest; monthly liquidity provides an improved 2.9 times coverage of demand debt (up from 1.7 times coverage at FYE 2012)

*Sound relationship with Aa1-rated University of Pittsburgh

*Strong management capabilities evidenced by the organization's historic ability to absorb operating challenges; management is actively implementing initiatives to improve the System's current financial performance

*Financial rigor and accountability provides for transparent and timely financial reporting. UPMC has voluntarily complied with all relevant provisions of the Sarbanes-Oxley Act since 2006

CHALLENGES

*Softening of operating performance in FY 2013 with operating and operating cash-flow margins of 0.6% and 6.1%, respectively, as compared with 2.1% and 7.4%, respectively, in FY 2012. Operating performance excludes rural floor revenues in FY 2012 ($23 million) and a non cash expense related to Pittsburgh Promise in FY 2013 ($54.5 million). Also, interest expense reclassified to operating expenses in FY's 2012 and 2013.

*Heightened level of discord in an already acrimonious operating environment that has been unusually litigious, divisive and distracting. UPMC now faces legal action filed by the City of Pittsburgh

*Increasing leverage, with acquisition of Altoona Regional ($100 mm debt assumption) and borrowing for routine and strategic capital ($125 mm), exacerbates concerns regarding declining cash-flow. Pro-forma maximum annual debt service coverage, based on FY 2013, declines to 3.1 times from 4.0 times at FYE 2012 while debt to cash-flow rises to a well above average (unfavorable) 4.6 times from 3.8 times; indirect debt (operating leases and pension obligations) is material adding an additional $810 million of liabilities

*Long standing concern that UPMC's investments are riskier and less liquid than most comparably rated peers, is a heightened credit challenge with declining cash-flow and rising leverage. Just $1.7 billion of the $3.5 billion of unrestricted cash and investments at FYE 2013 was available monthly and slightly more than 59% of total investments was available within one year, although recent changes in target asset allocation are designed to address this issue over the next 18 months.

*Weak demographics in Pittsburgh and the majority of the Western portion of Pennsylvania which is more pronounced given Commonwealth's budgetary challenges

*Exposure to the cyclical nature of the insurance business, through the UPMC Health Plan, a key component of the System's integrated delivery model

Outlook:

The stable rating outlook, which was revised from positive in June 2013, reflects a heightened level of discord in an acrimonious operating environment that is unusually fierce and now includes the overhang of litigation filed by the City of Pittsburgh, very recent pressure on already modest operating performance that suggests margins will thin at a time when leverage is increasing. As operations temper and fixed requirements on cash-flow increase with additional debt, our long-standing concern that UPMC's investments are measurably less liquid than comparably rated peers is exacerbated.

What could change the rating--UP

With suppressed performance and rising leverage an upgrade is unlikely in the near-term. Over the longer term a measurable and sustained improvement in operating margins, strengthening of liquidity and relative measures of leverage as well as a resolution and absorption of current challenges in marketplace

What could change the rating--DOWN

Greatest risks remains a significant increase in debt beyond current issuance or a prolonged decline in operating performance that results in further deterioration of operating metrics. In addition rating pressure could follow marked disruption in demand that translates to material market share loss.

METHODOLOGY

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

Daniel J Steingart
Asst Vice President - Analyst
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 University of Pittsburgh Medical Center's aggregate $225.5M Ser. 2013; 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