San Diego – Moody’s Investors Service has upgraded Scripps Health’s bond rating from A1 to Aa3, with a stable outlook. Fitch Ratings and Standard & Poor’s Rating Services have affirmed their AA- rating, also with a stable outlook.
“The improved bond rating from Moody’s and the affirmation of our ratings by Fitch and Standard & Poor’s are a validation of the strength of Scripps,” said Chris Van Gorder, Scripps President and CEO. “We are well-positioned for continued success and are confident about our future.”
Moody’s stated that the “upgrade from A1 to Aa3 and maintenance of the stable outlook reflects Scripps Health’s recent history of strong and stable operating performance levels, the system’s recently improved liquidity levels, and the articulation of a capital funding plan that is consistent with the higher rating level.”
Standard and Poor’s noted that “the AA- ratings reflect our view of Scripps’ overall solid financial profile highlighted by consistently strong operating performance, robust cash flow and improved liquidity.”
Fitch acknowledged the strong consistent financial performance and also indicated that “Scripps is led by a highly disciplined management team that continues to transform the system into a strong and viable health care provider in the highly competitive San Diego County market.”
“This upgrade from Moody’s now places Scripps in the AA- category with all three agencies and will translate to improved access to bank credit and our ability to borrow at lower costs to fund our capital plans more efficiently,” said Richard Rothberger, Executive Vice President and CFO of Scripps.
At this time, Scripps anticipates new tax exempt bond issuances of $215 million in 2012 and $200 million in 2014. Proceeds from the bonds will help fund capital projects at Scripps Health’s various patient care facilities.
Scripps capital plan calls for improvements to facilities throughout the Scripps Health system. Projects to be funded include construction of 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.
Scripps expects these capital projects to be funded through a combination of income from operations, debt financing and philanthropy.
Media Contact: Janice Collins