Moody's Investors Service has upgraded the bond rating on Adventist Health System's (FL) to A1 from A2 on $3.0 billion of outstanding debt and to A1/VMIG1 from A2/VMIG1 on the system's internally supported variable rate debt ($63 million in self-liquidity debt currently outstanding). We are also upgrading to A2 from A3 the rating on Adventist's subordinate debt, Capital Trust I Series A (1997) Capital Securities ($29 million outstanding). The rating outlook is revised to stable from positive at the higher rating level. The rating upgrade and stable outlook reflect the consistent, annual improvement in AHS' financial performance and balance sheet indicators. Debt coverage ratios show continued strengthening as a result of the improved performance.
The rating upgrade affects $3.0 billion of debt outstanding and listed at the conclusion of this report. Adventist will issue bonds in early August for approximately $366 million, which essentially nets to about $150 million in new money following various redemptions, defeasances and normal principal payments. We have incorporated the additional debt into our analysis and will issue a sale report when the details and documents of the financing are available.
Adventist Health System is headquartered in Winter Park, FL and is a multi-state health care system operating 35 acute care campuses in 10 states.
