CHI to Borrow $1.7B for ACOs, Market Expansion

Listen
Text
  • Small
  • Medium
  • Large

Englewood, Colo.-based Catholic Health Initiatives is set to issue $1.7 billion in taxable and tax-exempt bonds, which will go toward financing accountable care organizations, health information technology and other market expansion projects.

CHI will also use the money to invest in health insurance plans, clinically integrated networks and other risk-based initiatives. The $1.7 billion will significantly grow CHI's debt burden, and credit rating agencies have noticed. Earlier this month, Standard & Poor's Ratings Services downgraded CHI from "AA-" to "A+" due to the increased debt plans and weaker operating metrics.

Dean Swindle, CFO of CHI, said the debt burden will create some short-term challenges for the system, which has 87 hospitals and more than $12 billion in annual operating revenue. However, he said the plans will "pay dividends down the road" because it is a "vital investment" in CHI's future.

"CHI's bold plans are by definition going to create some risk — there is always inherent risk in strategic investment," Mr. Swindle said in a news release. "But not doing this will create far more risk."

More Articles on Hospital Finance:
Tenet Closes on $4.3B Vanguard Acquisition
Fitch Upgrades HCA's Debt After Strong First Half of 2013
Report: Restrictions on Tax-Exempt Bonds Would Damage Hospitals, Economy

Copyright © 2021 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars