Moody's assigns 'Baa1' rating to Butler Health System's bonds

Moody's Investors Service has assigned a "Baa1" long-term rating to $91.23 million of Butler (Pa.) Health System's series 2015A hospital revenue bonds to be issued through the Butler County Hospital Authority.

The series 2015A bonds will be issued as fixed rate bonds, and it is anticipated they will mature in 2039.

The rating assignment was supported by a number of factors, including the health system's "leading market share supported by geographic isolation, continued growth in operating performance and absolute cash through fiscal year end 2014," according to Moody's.

The system also faces some challenges, which were considered for the rating assignment, including Butler's "sizable amount of indirect debt," as well as "unexpected issuance of new debt challenging already leveraged debt metrics, a competitive environment, and a disproportionate reliance on Medicare," according to Moody's.


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