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Fitch Affirms Trinity Health's (MI) Self-Liquidity Rating at 'F1+'
[October 01, 2015]

Fitch Affirms Trinity Health's (MI) Self-Liquidity Rating at 'F1+'


Fitch Ratings has affirmed the 'F1+' short-term ratings on approximately $1.8 billion of various bonds and commercial paper (CP) issued on behalf of the Trinity Health Credit Group (Trinity).

KEY RATING DRIVERS

STRONG FINANCIAL PROFILE: Fitch rates Trinity's long-term obligations at 'AA' with a Stable Outlook. The long-term rating reflects the strength of Trinity's geographically diverse delivery system, satisfactory profitability metrics, strong management practices, and adequate liquidity position. Additionally, Trinity's moderate debt burden continues to support solid debt service coverage.

LIQUID RESOURCES AVAILABLE FOR UNREMARKETED PUTS: The 'F1+' rating reflects the adequacy of Trinity's internal liquidity resources to meet optional and mandatory tenders presented by its variable-demand debt and CP programs. Such resources include cash; highly liquid, highly rated investments; and dedicated bank liquidity facilities. Investments are discounted based on Fitch's criteria. At Aug. 31, 2015, Trinity maintained highly liquid resources to cover the maximum mandatory put exposure on any given date in excess of Fitch's criteria of 1.25x.

RATING SENSITIVITIES

MAINTENANCE OF ADEQUATE LIQUIDITY: Fitch expects Trinity Health Credit Group to maintain adequate internal liquid resources to cover its total put exposure in excess of 1.25x to maintain the 'F1+' short-term rating.

CREDIT PROFILE

Trinity is one of the largest Catholic health care delivery systems in the U.S. Operating in 20 states, Trinity is composed of 86 hospitals, over 100 long-term care facilities and programs, and over 3,000 employed physicians. In fiscal 2014 (year ended June 30) Trinity generated total revenues of $13.6 billion.

'F1+' SHORT-TERM LIQUIDITY RATING

The 'F1+' rating reflects the adequacy of Trinity's eligible cash, investments, and dedicated lines of credit to fund any un-remarketed puts on its variable rate demand bonds and CP program. At Aug. 31, 2015, Trinity had a total of approximately $2.6 billion of highly liquid, unrestricted cash and fixed income securities, and dedicated working capital lines available. Trinity's eligible liquid resources available to its maximum tender exposure in any given week exceeds Fitch's 'F1+' threshold of 1.25x. Fitch received a written internal procedures letter from the organization, which outlines internal policies to meet any funding requirements. Fitch receives monthly investment reports, which are used to monitor Trinity's internal liquid resources relative to its cash and investment position relative to its funding exposure.

For more information on Trinity, see Fitch's press release 'Fitch Rates Trinity Health Credit Group (MI) 2015 Revs 'AA', Outlook Stable', dated Jan. 27, 2015 available at 'www.fitchratings.com'.



Additional information is available at 'www.fitchratings.com'

Applicable Criteria


Rating U.S. Public Finance Short-Term Debt (pub. 07 Jan 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=846969

Revenue-Supported Rating Criteria (pub. 16 Jun 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750012

U.S. Nonprofit Hospitals and Health Systems Rating Criteria (pub. 09 Jun 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=866807

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=991667

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=991667

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


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