Fitch upgrades Mount Sinai Medical Center's bond rating: 4 things to know

Fitch Ratings has upgraded the rating assigned to revenue and refunding bonds issued on behalf of Miami Beach, Fla.-based Mount Sinai Medical Center to "BBB+" from "BBB," and revised the system's outlook to stable from positive.

Here are four things to know about the rating action.

1. The rating upgrade affects $180.9 million of series 2014 bonds and $125.9 million of series 2012 bonds. 

2. The rating upgrade was based on a number of factors, including MSMC's improving unrestricted balance sheet reserves, leading market position and sound profitability. In fiscal 2014 (Dec. 31, 2014; audited), MSMC earned $16.5 million in operating income, which, although significantly less than the prior year's all-time high of $41.7 million gain, was consistent relative to historical performance and in-line with budgeted expectations, according to Fitch.

3. Fitch also considers MSMC's strong community support a key credit strength. MSMC continues to benefit from its relationship with the Mount Sinai Medical Center Foundation, which has a consistent fundraising track record. Since 2001, the foundation has raised an average annual of $13 million to $14 million and has transferred funds to MSMC to support operations. Additionally, the foundation is expected to contribute approximately $95 million in funding for MSMC's upcoming replacement hospital tower project.

4. So far, construction on MSMC's replacement hospital tower project is on time and on budget, but Fitch noted the inherent risks with such a project that include cost overruns and construction delay. Although unexpected, Fitch said any material adverse event impacting the project would be viewed negatively.


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