Fitch Affirms Cone Health's (NC) Short-Term Rating at 'F1+'

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the 'F1+' rating on the following outstanding variable rate debt issued by the North Carolina Medical Care Commission on behalf of Cone Health:

--$47,500,000 hospital revenue bonds series 2004A;

--$47,885,000 hospital revenue bonds series 2011B.

KEY RATING DRIVERS

SOLID CREDIT PROFILE: Fitch rates Cone Health's long-term obligations at 'AA' with a Stable Outlook. The long-term rating reflects Cone Health's dominant market position, solid liquidity and adequate profitability metrics. The organization's coverage continues to be strong due to its moderate debt burden.

LIQUID RESOURCES AVAILABLE FOR UNREMARKETED PUTS: The 'F1+' rating reflects the adequacy of Cone Health's eligible cash, investments, and dedicated lines of credit to fund any un-remarketed puts on its variable rate demand bonds. Such resources include cash; highly liquid, highly rated investments; and dedicated bank liquidity facilities. Investments are discounted based on Fitch's criteria. At Sept. 30, 2015 Cone Health maintained highly liquid resources to cover 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 Cone Health 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

Cone Health is a nonprofit, integrated healthcare system headquartered in Greensboro, North Carolina, operating four acute care and two specialty hospitals, with total revenues of $1.54 billion in the fiscal year ending Sept. 30, 2015 (unaudited).

'F1+' SHORT-TERM LIQUIDITY RATING

The 'F1+' rating reflects the adequacy of Cone Health's eligible cash, investments, and dedicated lines of credit to fund any un-remarketed puts on its variable rate demand bonds. At Sept. 30, 2015, Cone Health had $286.3 million of highly liquid, unrestricted cash and fixed income securities, and dedicated working capital lines available. Cone Health'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.

For more information on Cone Health, see Fitch's press release 'Fitch Affirms Cone Health (NC) 2015 Revs 'AA', Outlook Stable', dated Jan. 22, 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. 17 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873508

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=998234

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=998234

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 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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160122005775/en/

Fitch Ratings
Primary Analyst
Eva Thein
Senior Director
+1-212-908-0674
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Emily Wadhwani
Director
+1-312-368-3347
or
Committee Chairperson
James LeBuhn
Managing Director
+1-312-368-2059
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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