Fitch Ratings last week upgraded its underlying rating for $53.6 million of bonds issued by the Nebraska Investment Finance Authority on behalf of the Children's Healthcare Services Obligated Group.
The agency upgraded the underlying rating to A from BBB-plus for the outstanding Series 1997 revenue bonds, assigning a stable outlook. Ambac Assurance Corp. insures the debt.
The upgrade reflects the hospital and health care system's improvements in profitability, strong liquidity, and dominant market share position, Fitch analyst Anthony Houston wrote in a rating report. The system posted a $5.5 million operating loss in fiscal 2001, but has since reported improvements in its operating performance year over year.
The stable outlook takes into account the system's plans to issue additional debt in 2007. Officials plan to issue bonds to refinance debt sold in 1997 and raise about $20 million of new money. That will help fund a $50 million ambulatory pediatric clinical building.
Analysts cited the future capital plans, rising labor costs, and Medicaid load as credit concerns. The system has a five-year, $155 million capital plan.
CHS operates a 142-bed pediatric hospital in Omaha, an ambulatory care pavilion, and two urgent-care centers, and is the majority owner of a pediatric primary care provider system.
In fiscal 2005, CHS had total operating revenues of $181.8 million.
