DALLAS - Denver's National Jewish Health has seen its rating from Fitch Ratings slip one notch to BBB from BBB-plus after reporting a $5.3 million operating loss amid a weakening balance sheet. The downgrade brings Fitch in line with Standard & Poor's on the nonprofit's $44.9 million of debt.
In fiscal year 2008 which ended June 30, NJH, which operates National Jewish Hospital, reported that unrestricted cash had fallen to $34.2 million from $46.4 million in the previous fiscal year. Days cash on hand dropped from 136.7 to 83.6, and the ratio of revenues to debt service fell from 13.7 times debt service to 10.1.
"As a result, several of NJH's liquidity indicators have weakened significantly and are below Fitch BBB medians," analysts noted.
The Fitch rating matches Standard & Poor's underlying rating that was affirmed with a stable outlook in December 2007. Moody's Investors Service does not rate the credit. Standard & Poor's ranks National Jewish Hospital as a small hospital, based on revenues.
In a report on the health care sector last year, Standard & Poor's said it "anticipates that there may be a slightly larger proportion of small hospital credits that have trouble over the next one to two years and beyond."
National Jewish is expected to lose about $3 million in fiscal 2009.
NJH has $44.9 million of debt outstanding from revenue bond issues in 1998 and 2005. The bonds were issued through the Colorado Health Facilities Authority. The 2005 issue for $13.5 million of variable-rate debt, backed by a letter of credit from JPMorgan Chase, financed a new research and clinical building, two floors of clinical space, and three floors for research and laboratory space.
In its 108 years, National Jewish has remained a landmark for sufferers of respiratory illnesses, beginning as a treatment center for tuberculosis, a disease that played a key role in the development of Denver by attracting prominent people suffering from the disease.
The original National Jewish Hospital, founded by "The Mother of Charities" Frances Wisebart Jacobs, saw its scheduled opening in 1893 delayed six years by the Silver Panic that wiped out some of Denver's wealthiest citizens, including the legendary silver baron Horace A.W. Tabor.
For the past 10 years, National Jewish has been ranked as the top respiratory hospital in the nation by U.S. News and World Report.
