Fitch Ratings has placed the BBB-plus rating on $85.2 million West Shore Area Hospital Authority, Pa., series 2011 A and B issued on behalf of Holy Spirit Health System (HSHS) on Rating Watch Positive.
The bonds previously had a stable outlook.
The bonds are secured by a pledge of gross revenues of the Obligated Group, and an open-end mortgage on hospital property. Holy Spirit Hospital is the only member of the Obligated Group.
There is no debt service reserve fund. Upon consummation of the merger, HSHS became an affiliate of GHS and GHS will assume the assets and liabilities of HSHS.
On June 19, the Sisters of Charity Healthcare Corporation and Holy Spirit Health System (HSHS) signed a Definitive Agreement to Merge with Geisinger Health System GHS)and the merger is expected to close around October 1, 2014. The Rating Watch Positive reflects the potential operational and financial support which HSHS may realize as an affiliate of GHS.
HSHS operates Holy Spirit Hospital (HSH, or the hospital), a 311 licensed bed acute care hospital located in Camp Hill, PA. The hospital makes up approximately 86% of the revenues and 81% of the unrestricted net assets of HSHS. Other significant members of the system include West Shore ALS, a pre-hospital care and emergency medical services company, Holy Spirit Corporation, a real estate holding company, and Spirit Physician Services, Inc. (SPSI), an employed multispecialty physician practice. HSHS has total annual revenues of $364.7 million (fiscal year ended June 30, 2014, unaudited).
GHS, which is not rated by Fitch, is a large, integrated health care system consisting of 5 acute care hospitals (1,326 licensed beds), over 1,100 employed physicians and 478,000 member Geisinger Health Plan. In fiscal 2014, GHS reported total revenues of $3.98 billion.
