|[July 09, 2014]
Fitch Affirms Advocate Health Care's (IL) Self-Liquidity Bonds at 'F1+'
CHICAGO --(Business Wire)--
Fitch Ratings has affirmed its 'F1+' short-term rating on the following
bonds based on self-liquidity provided by Advocate Health Care Network
--$21.9 million Illinois Health Facilities Authority revenue bonds,
--$21.2 million Illinois Health Facilities Authority revenue bonds,
--$21.9 million Illinois Finance Authority revenue bonds, series
--$70 million Illinois Finance Authority revenue bonds, series 2011B.
KEY RATING DRIVERS
LIQUID RESOURCES AVAILABLE FOR UNREMARKETED PUTS: The 'F1+' rating
reflects Advocate's availability of highly liquid resources to cover the
mandatory tender on its put bonds. At March 31, 2013, Advocate's
eligible cash and investment position available for same-day settlement
would cover the cost of the maximum mandatory put on any given date well
in excess of Fitch's criteria of 1.25x.
STRONG FINANCIAL PROFILE: Fitch rates Advocate's long-term obligations
at 'AA'. The long-term rating reflects Advocate's consistently strong
operating performance, light debt burden, robust liquidity and leading
market position. Advocate's solid operating cash flow generation
continues to support substantial balance sheet strength and its
liquidity indicators consistently exceed Fitch's 'AA' category median
MAINTENANCE OF ADEQUATE LIQUIDITY: Fitch expects Advocate to sustain
adequate internal liquid resources to cover its total put exposure in
excess of 1.25x to maintain the 'F1+' short-term rating.
Advocate is an integrated health care system serving the Chicago
metropolitan area and central Illinois. The system includes 11 acute
care hospitals and a children's hospital (totaling approximately 3,500
licensed beds), primary and specialty physician services, home health,
hospice, and outpatient centers serving the Chicago metropolitan area
and central Illinois. Total revenues in audited fiscal 2013 (Dec. 31
fiscal year end) were $4.9 billion.
Fitch's analysis is based on the consolidated system. The obligated
group consists of Advocate Health Care Network Corp, Advocate Health and
Hospitals, Advocate North Side Health Network, and Advocate Condell
Medical Center. As of Dec. 31, 2013, the obligated grouprepresented
approximately 86% of total assets and 88.7% of total operating revenues
of the consolidated system.
Advocate provided Fitch with an internal procedures letter outlining the
procedures to meet any un-remarketed puts. In addition, Advocate
provides monthly liquidity reports to Fitch to monitor the sufficiency
of Advocate's cash and investment position relative to its mandatory put
Advocate's disclosure includes annual audited financial statements as
well as quarterly unaudited balance sheet, income statement, cash flow
statement, an extensive MD&A, and utilization statistics. The
information is posted to the Municipal Securities Rulemaking Board's
EMMA system. In addition, management holds routine calls with rating
agencies and with investors. Fitch considers Advocate's disclosure
standards to be best practice.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Rating U.S. Public Finance Short-Term Debt', (Dec. 9, 2013);
--'U.S. Nonprofit Hospitals and Health Systems Rating Criteria' (May 30,
Applicable Criteria and Related Research:
Rating U.S. Public Finance Short-Term Debt
U.S. Nonprofit Hospitals and Health Systems Rating Criteria
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AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
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CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
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