Fitch Ratings has affirmed a "BBB" bond rating and a stable rating outlook for Tufts Medical Center in Boston.
Softer volumes and some one-time expenses early in the year have led to a negative 0.2 percent operation margin for Tufts — a $1 million loss on operations — through the first nine months of fiscal year 2014. However, the hospital's maximum annual debt service has remained strong, at 2.6 times, according to Fitch.
Furthermore, Tufts has demonstrated solid expense management, with total expenses rising by just 1.1 percent from fiscal year 2012 to 2013. Other factors that influenced Fitch's rating affirmation include Tufts' proposed affiliation with Lowell (Mass.) General Hospital and its solid liquidity position, with $375.2 million in unrestricted cash and investments as of June 30.
Tufts recently reported a $16.9 million surplus on $177.3 million in revenue for its third quarter ended June 30, up from a $1.8 million surplus on $164.1 million in revenue during the third quarter of last year. For the year to date, ended June 30, Tufts reported a $16.1 million surplus on $512.5 million in revenue, compared with a nearly $7.1 million surplus on $492 million in revenue last year.
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