Fitch Revises Covenant Health Outlook

Fitch Ratings revised its outlook to stable from negative on $130 million of Covenant Health System revenue bonds in Massachusetts and New Hampshire.

Fitch, while affirming its A rating, cited the following revenue bonds: New Hampshire Health and Education Facilities Authority, Series 2012, $12.3 million and Series 2004, $18.5 million; Massachusetts Development Finance Agency, Series 2012, $26.9 million; and Massachusetts Health and Educational Facilities Authority, $72.7 million, Series 2007, A and B.

The rating agency cited a $3.6 million operating loss in fiscal 2014, ending March 31.

"The system's negative 2.5% operating margin and 3.6% operating Ebitda margin through the three-month interim period compared unfavorably against Fitch's A category medians of 3.3% and 10.7%, respectively, which Fitch views negatively," it said in a statement.

Additionally, according to Fitch, management expects more pressure as the system works to implement the federal Affordable Care Act.

For reprint and licensing requests for this article, click here.
Healthcare industry New Hampshire Massachusetts
MORE FROM BOND BUYER