The rating affirmation was supported by a number of factors, including BCH’s designation as a critical access hospital, and its solid cash flow in fiscal year 2014 and interim FY 2015. BCH produced a 5.8 percent operating and an 18.7 percent operating EBITDA margin in fiscal year 2014, which was sufficient to provide 3.3x coverage of maximum annual debt service, according to Fitch. The trend continued through the five-month interim period ended Feb. 28, 2015 with a 17 percent operating EBITDA margin and 3.1x coverage.
BCH also faces some challenges, which were considered for the rating affirmation, such as having an elevated debt burden.
Overall, Fitch said it expects BCH “to maintain healthy operating cash flow levels which support balance sheet preservation at a minimum, and moderating leverage levels over the longer term.”
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