Fitch Rates Johns Hopkins Health System (MD) Series 2012A Bonds 'AA-'; Affirms Outstanding Debt

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has assigned an 'AA-' rating to the approximately $53.5 million Maryland Health and Higher Educational Facilities Authority revenue notes, The Johns Hopkins Health System Obligated Group Issue, series 2012A. In addition, Fitch has affirmed the 'AA-' rating on Johns Hopkins Health System's (JHHS) outstanding debt.

The Rating Outlook is Stable.

The series 2012A bonds will be a direct loan with Citi at an indexed floating rate for an initial period until February 15, 2017. The bond proceeds will refinance JHHS's existing series 2004A commercial paper. Total proforma debt outstanding is approximately $1.4 billion.

SECURITY:

Gross revenue pledge of the JHHS obligated group.

KEY RATING DRIVERS:

WORLD-RENOWNED REPUTATION: JHHS's reputation and brand recognition for excellent tertiary and quaternary care and state of the art clinical research is a primary credit strength as JHHS continues to diversify its revenue base through growing international activity.

GROWING HEALTH SYSTEM: JHHS now consists of six hospitals, six ambulatory campuses and 31 community physician group practice sites with two hospital affiliates added in fiscal 2011 (Sibley Memorial Hospital, D.C. in November 2010 and All Children's Hospital, St. Petersburg, FL in April 2011).

IMPROVED FINANCIAL PERFORMANCE: JHHS's financial performance is solid and reflective of its 'AA' category rating. Balance sheet metrics have improved with the addition of the two hospital affiliates; however, the outstanding debt of these affiliates remain separately obligated.

LONG-TERM CAPITAL NEEDS: There has been significant investment in the JHHS facilities and at the main campus in Baltimore with the new clinical building on schedule to open in April 2012. Longer-term master facility plans will need to be addressed for the Bayview, Suburban and Sibley facilities.

CREDIT PROFILE:

JHHS is an integrated health care system consisting of six acute care hospitals, six ambulatory campuses and includes several international operations. With 1,051 licensed beds, JHH is the largest hospital in the state of Maryland (main campus located in Baltimore). JHHS had total operating revenue of $4.05 billion in fiscal 2011. JHHS covenants to disclose annual audits within 150 days of fiscal year end and unaudited quarterly information within 45 days of quarter end (first three quarters) and within 60 days of fourth quarter end to the MSRB's EMMA system. Financial disclosure to date has been thorough in terms of timeliness and format and includes both consolidated and consolidating statements.

For more information, see Fitch's report 'Johns Hopkins Health System, Maryland' dated Oct. 17, 2011.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Revenue-Supported Rating Criteria' (June 20, 2011);

--'Nonprofit Hospitals and Health Systems Rating Criteria'

(Aug. 12, 2011).

Applicable Criteria and Related Research:

Revenue-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=637130

Nonprofit Hospitals and Health Systems Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648836

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Fitch Ratings
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Secondary Analyst:
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Senior Director

KEYWORDS:   United States  North America  Maryland  New York

INDUSTRY KEYWORDS:   Health  Hospitals  Professional Services  Finance

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