Here are three things to know about the ratings.
1. The ratings, which apply to roughly $3.1 billion of debt outstanding as of March 31, involve the following:
- Issuer Default Rating — “BB+”
- Senior secured bank facility rating — “BBB-/RR1”
- Senior secured bonds rating — “BBB-/RR1”
2. Fitch affirmed the ratings based on various factors, such as UHS’ strengthening cash flows, which stem from a stabilizing acute-care business and growing behavioral health operations, according to the ratings agency. Additionally, UHS has the strongest balance sheet in the for-profit hospital sector, and UHS’ same-hospital acute-care admissions growth for the first quarter 2015 and fourth quarter 2014 were 4.3 percent and 3.5 percent, respectively.
3. Fitch also regards the Patient Protection and Affordable Care Act as a net positive for UHS and other hospital operators because of expected net revenue growth from decreases in uncompensated care this year. However, Fitch also believes it’s likely that profit gains will drop in later years because of “a constrained healthcare reimbursement [environment] for the foreseeable future,” according to the release.
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