Fitch also affirms the 'AA-' rating on
The Rating Outlook is Stable.
The series 2016 bonds are expected to be issued as fixed-rate, tax-exempt bonds and sold via negotiation the week of
The bonds are secured by a revenue pledge of the obligated group (OG).
KEY RATING DRIVERS
INTEGRATED DELIVERY MODEL: The 'AA-' rating reflects
STABILIZING COMPETITIVE LANDSCAPE:
MARKET LEADER IN
MANAGEABLE DEBT BURDEN: The system's leverage remains manageable with pro forma maximum annual debt service (MADS) remaining at a moderate 2.4% of revenues, in line with the Fitch 'AA' median, and MADS coverage of pro forma debt by EBITDA was at an adequate 3.0x, slightly higher than the 2.8x in the prior year, but lower than the category median of 5.7x.
STABLE LIQUIDITY: While historically lower than Fitch's 'AA' medians,
NEED TO MAINTAIN ADEQUATE OPERATING CASH FLOW: Maintenance of the 'AA-' rating is contingent on
'A-'), a four-hospital system based in
UPMC HIGHMARK CONSENT DECREE
The maintenance of the rating and Stable Outlook are based on the evidence for the last 18 months that
Fiscal 2016 ended with a small improvement in operating performance, producing operating income of
A dispute with Highmark over outpatient oncology billing underpayment, which went to arbitration, was decided in favor of
The budget for fiscal 2017 mirrors current levels of profitability. The main drivers on the positive side are improved payer mix including
NO MATERIAL INCREASE IN DEBT AND STABLE LIQUIDITY
Following the issuance of the series 2016 bonds,
Unrestricted cash and investments were reported at
Additional information is available at www.fitchratings.com
Revenue-Supported Rating Criteria (pub.
Dodd-Frank Rating Information Disclosure Form
Source: Fitch Ratings