Fitch affirms St. Tammany Health System’s ‘AA-’ credit rating
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St. Tammany Health System
Wednesday, August 24, 2022
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FOR IMMEDIATE RELEASE – Wednesday, Aug. 24, 2022
MEDIA CONTACT: Mike Scott | 985-898-4494 | mscott@stph.org
(STHS photo illustration)
Fitch Ratings has affirmed the ‘AA-’ long-term rating on the series 2018A and 21018B bonds issued by St. Tammany Health System. In addition, Fitch affirmed the health system’s ‘AA-’ Issuer Default Rating, declaring the rating outlook to be stable.
In an analytical conclusion included with its announcement of the upgrade on Tuesday (Aug. 23), Fitch wrote:
St. Tammany's ‘AA-’ rating reflects the system's strong financial profile and operating risk assessment supported by consistently robust, albeit recently weaker, operating cash flows that have resulted in solid liquidity growth, even during the pandemic and ensuing inflationary headwinds.The rating also reflects St. Tammany’s leading market share in a growing service area, as well as the Joint Operating Agreement (JOA) in place between St. Tammany and the Ochsner Clinic Foundation and Ochsner Heath System (Ochsner). Under the agreement, St. Tammany and Ochsner coordinate clinical services and share the combined operating income in the service area. This 2014 collaborative agreement, with an initial 20-year term, has created operational efficiencies for St. Tammany and has supported consistent and profitable volume and revenue growth for both parties.
St. Tammany's ‘AA-’ rating reflects the system's strong financial profile and operating risk assessment supported by consistently robust, albeit recently weaker, operating cash flows that have resulted in solid liquidity growth, even during the pandemic and ensuing inflationary headwinds.
The rating also reflects St. Tammany’s leading market share in a growing service area, as well as the Joint Operating Agreement (JOA) in place between St. Tammany and the Ochsner Clinic Foundation and Ochsner Heath System (Ochsner). Under the agreement, St. Tammany and Ochsner coordinate clinical services and share the combined operating income in the service area. This 2014 collaborative agreement, with an initial 20-year term, has created operational efficiencies for St. Tammany and has supported consistent and profitable volume and revenue growth for both parties.
Fitch’s full assessment of St. Tammany Health System, known formally as St. Tammany Parish Hospital Service District No. 1, can be found at FitchRatings.com.
Founded in 1914, Fitch Ratings is one of the “Big Three” credit ratings agencies nationally recognized by the Securities and Exchange Commission. The others are Moody’s and Standard & Poor’s.