San Diego – Fitch Ratings and Standard & Poor’s Rating Services have upgraded Scripps Health from an A+ to a AA- rating with a stable outlook for the issuance of $220 million in California Health Facilities Finance Authority revenue bonds. In addition, Scripps’ A1 rating was recently reaffirmed by Moody’s Investors Service.
Scripps Health will issue the $220 million in three series, with $120 million issued as fixed rate bonds and the remaining $100 million issued as variable rate bonds. The bond offerings are expected to close by Feb. 4, 2010.
Proceeds from the series 2010 revenue bonds will fund $120 million in capital projects at Scripps Health’s various patient care facilities and will reimburse Scripps Health for approximately $100 million in prior capital expenditures.
In issuing its upgrade, Fitch reported that “Scripps Health has maintained a strong financial profile which continues to exhibit solid operational performance, strong cash flow generation and manageable debt burden.” Standard & Poor’s noted that fiscal year 2009 marked Scripps’ “eighth consecutive year of consistent solid profitability driven by the current management team.”
Scripps Health’s capital plan for fiscal years 2010-2014 totals approximately $1.475 billion. The plan includes infrastructure upgrades and expansion projects at Scripps Health’s various hospitals, and costs for new facilities including the Scripps Cardiovascular Institute at Scripps Memorial Hospital La Jolla; a new emergency department and critical care building at Scripps Memorial Hospital Encinitas; and the new Conrad Prebys Emergency and Trauma Center at Scripps Mercy Hospital San Diego. Other projects include construction of parking structures, seismic upgrade projects and investment in information technology upgrades.
Scripps expects capital projects for fiscal years 2010-2014 to be funded through a combination of income from operations, debt financing and philanthropy.
ABOUT SCRIPPS HEALTH
Founded in 1924 by philanthropist Ellen Browning Scripps, Scripps Health is a $2 billion nonprofit community health system based in San Diego, Calif. Scripps cares for a half-million patients annually through the dedication of 2,750 affiliated physicians and 12,700 employees. It includes four acute-care hospitals on five campuses, 19 outpatient clinics, home health care services, and an extensive ambulatory care network. Recognized as a leader in the prevention, diagnosis, and treatment of disease, Scripps is also at the forefront of clinical research and graduate medical education.
Contact: Steve Carpowich