LOS ANGELES— Providence Health & Services of Washington state received an AA rating affirmation from Fitch Ratings ahead of plans to issue $356 million in revenue and refunding bonds on July 20.
The series 2015A and series 2015B bonds will price through a negotiated sale conducted by conduit issuer Washington Health Care Facilities Authority.
The outlook is stable.
Providence is a large, multi-state health system with 34 acute care hospital facilities in five states, an Oregon health insurer with over 600,000 members, and nearly 3,600 employed physicians.
In 2014, Fitch said in a July 7 report that the hospital system generated total revenues of approximately $12.5 billion.
Fitch's action affects $3.7 billion in outstanding debt issued through various authorities and the F1-plus short-term rating based on the self-liquidity provided by Providence on the series 2013F Providence Health System Obligated Group taxable commercial paper note program authorized up to $200 million.
The proceeds will be used to fund approximately $77.6 million of construction at Kadlec Regional Medical Center and reimburse the system for prior capital expenditures, according to Fitch. The proceeds also will refund and advance refund roughly $278.4 million of outstanding WHCFA series 2008A, C, and D bonds, and pay the costs of issuance.
Providence is considering issuing another $296 million of revenue bonds in the near term, which Fitch wrote would be used for refinancing and additional new money, and has been incorporated into the current rating action.
Providence's geographic diversity and business line diversity are key credit strengths, Fitch wrote.
"The increasing breadth of healthcare services across Washington State and in southern California is viewed favorably as it positions the organization for the evolution and development of population health management services," Fitch wrote.
