Overall excellence will offset Mayo Clinic's weaker operating performance in next years, agencies say

While its relatively weaker operating performance may continue in the shorter-term, Rochester, Minn.-based Mayo Clinic has had its long-term ratings affirmed because of its excellent reputation in overall health services, both S&P Global and Moody's said.

Mayo Clinic's revenue bonds remain at  "AA" with a stable outlook, S&P said.

Mayo Clinic's "Aa2" stable credit profile is characterized by its excellent reputations for clinical services, research and education, Moody's said.

Adding to operating pressures such as labor costs that are common to the industry as a whole, Mayo Clinic's extensive capital spending in the next few years will likely be funded partially by debt. As much as $11 billion may be spent on such projects in the next five years, S&P said.

Mayo Clinic operates three destination medical centers, in Rochester, Phoenix/Scottsdale, Ariz., and Jacksonville, Fla. It also owns and operates a network of 12 major clinical organizations and 17 hospitals, known as Mayo Clinic Health System, which offers services in 72 communities in southern Minnesota, northern Iowa, and western Wisconsin.

The health system reported $595 million in net operating income in 2022 which compared to a $1.2 billion gain in 2021. Liquidity was termed "strong" with about 300 days of cash on hand, Moody's said.

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