CHICAGO — Ascension Health Alliance, the nation's largest not-for-profit healthcare system, plans to sell about $1.9 billion of debt over the next month.
Most of the bonds are being offered through the Wisconsin Health & Educational Facilities Authority, the Alabama Special Care Facilities Authority of Birmingham, the Alabama Special Care Facilities Authority of Mobile, and the Michigan Finance Authority.
All but $250 million of the sale will carry a tax-exemption and is being sold through the conduits. Most of the deal is structured in a fixed-rate or as mandatory tender securities and will sell late this month. A smaller piece of variable-rate demand bonds will sell early next month.
Proceeds will finance, refinance or reimburse Ascension for capital expenditures and refinance taxable commercial paper. About $250 million represents new debt. Ascension operates 105 general acute care hospitals in 24 states and Washington, D.C. that generated $21 billion in revenues last year.
Ahead of the sale, Moody's Investors Service affirmed the system's Aa2 rating and Fitch Ratings and Standard & Poor's affirmed their AA-plus on the deal and the system's $5 billion of debt.
"The ratings reflect our view of Ascension's excellent geographic and financial dispersion as the largest nongovernmental not-for-profit health system in the country; continued robust financial performance in fiscal 2016…significant unrestricted liquidity; and strong management practices." said S&P analyst Kevin Holloran. Ascension is at the highest rating level for the health care sector as S&P has no systems at AAA due to general industry risk.
