Catholic Healthcare West's bonds benefit from state backing

Standard & Poor's has assigned an "A" long-term rating to a handful of bond series issued on behalf of Catholic Healthcare West. 

In issuing the bonds, S&P spoke highly of CHW's own financial strength, including its history of solid operating income and strong cash flow over several years. This comes as CHW goes through a series of complicated bond transactions which will ultimately leave it with debt of about $4.3 billion, including taxable and tax-exempt long-term debt, capital leases and notes payable. The series of bond issues are largely backed by the Arizona Health Facility and the California Health Facilities Financing Authority.

To make sure interest rates don't go up too much on the bonds, the health system has set up a variety of swaps to hedge against such risks. S&P has assigned CHW a Debt Derivative Profile of "2" on a four-point scale, representing the lowest risk.

All told, S&P has rated the system's outlook as "stable." To improve that rating, CHW will have to keep up its solid financial performance while improving its key balance sheet metrics, the agency said.

To learn more about S&P's rating:
- read this S&P press release

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