Here are four things to know about the rating action and the system’s outlook.
1. The “Aa2” rating was supported by a number of factors, including CHOA’s track-record of exceptionally strong operating margins, equally impressive balance sheet and debt coverage ratios, and role as the distinctly leading provider of high-end pediatric care in the Atlanta area, according to Moody’s.
2. The system also faces challenges, such as being dependent on Medicaid and special supplemental payment sources, and therefore is vulnerable to potential federal and state funding cutbacks.
3. The short-term “VMIG 1” rating is based on the presence of bank standby bond purchase agreements to support CHOA’s variable rate demand obligation debt.
4. The system’s outlook is stable, which reflects Moody’s expectation “that CHOA will maintain very strong operating margins and exceptional balance sheet and debt coverage ratios.”
More articles on healthcare finance:
For-profit hospital stock report: Week of June 15-19
If Supreme Court strikes subsidies, health system profits would likely take a small hit
4 things the CFO needs to know
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.