AdventHealth Obligated Group (formerly Adventist Health System/Sunbelt Obl Grp) : Update to credit analysis - Moody's Global Credit Research

AdventHealth Obligated Group (formerly Adventist Health System/Sunbelt Obl Grp) : Update to credit analysis

AdventHealth Obligated Group (formerly Adventist Health System/Sunbelt Obl Grp) : Update to credit analysis - Moody's Global Credit Research
AdventHealth Obligated Group (formerly Adventist Health System/Sunbelt Obl Grp) : Update to credit analysis
Published May 26, 2023
7 pages (4271 words) — Published May 26, 2023
Price US$ 250.00  |  Buy this Report Now

About This Report

  
Brief Excerpt:

...AdventHealth (AH, Aa2 stable) will benefit from its large scale, highly centralized model and well-tenured management team with demonstrated ability to cut costs to realize strong operating cash flow (OCF) margins and low operating leverage. AH expects to return to historical margin levels by fiscal 2024. Combined with disciplined capital spending, cash metrics will likely return to more solid levels, albeit well-below peers. Atypical of multistate systems, revenues and cash flow will continue to be heavily concentrated in Florida. To better position the system in these growing, competitive markets, and amid an ongoing shift to outpatient services, AH will continue to diversify offerings beyond inpatient acute care services. Recent developments affecting its Colorado and Georgia markets will present some uncertainty. However, management's decision to partner with the University of Chicago in a challenging Illinois market highlights its commitment to maintaining financial strength. Strong...

  
Report Type:

Credit Opinion

Issuer
AdventHealth Obligated Group (formerly Adventist Health System/Sunbelt Obligated Group)
Format:
PDF Adobe Acrobat
Buy Now

AdventHealth Obligated Group (formerly Adventist Health System/Sunbelt Obl Grp): Update to credit analysis - Credit Opinion – 2024/05/23 – US$ 250.00 – ...AdventHealth (AH, Aa2 stable) will benefit from its large scale, highly centralized model and well-tenured management team with demonstrated ability to cut costs to realize strong operating cash flow (OCF) margins and low operating leverage. This is highlighted by its ability to return to historical 12%-13% OCF margins (excluding one time items) and low debt to cash flow (below 2x) in fiscal 2023 ahead of prior forecasts. Cash metrics also improved although still remain below average for the rating. Atypical of multistate systems, revenues and cash flow will continue to be heavily concentrated in Florida. To better position the system in these growing, competitive markets, AH will continue to diversify offerings beyond inpatient acute care services. AH's Colorado and Georgia markets face operating challenges but management expects to turn these around within the next two years. Strong daily liquidity will support AH's VMIG 1 and P-1 ratings....

Moody's Ratings assigns Aa2 to AdventHealth's Series 2024 bonds; outlook stable - Rating Action – 2024/05/22 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

Moody's assigns Aa2 to AdventHealth Obligated Group's (FL) Ser. 2023; outlook stable - Rating Action – 2023/05/25 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

AdventHealth Obligated Grp (f/k/a Adventist Health System/Sunbelt Obligated Grp): Update to credit analysis - Credit Opinion – 2022/07/01 – US$ 250.00 – ...AdventHealth (AH, Aa2 stable) will benefit from its large scale, highly centralized model and well-tenured management team with demonstrated ability to cut costs to realize strong operating cash flow (OCF) margins and low operating leverage. Its history of consistently strong operating performance supports the likelihood that, following a weak Q122 attributed to a rise in agency staffing and COVID-related volume reductions, AH will be able to achieve still solid OCF margins in 2022 and show continual improvement, returning to strong historical levels by 2024. Returning to and sustaining favorable margins and low operating leverage would help offset days cash that will remain solid but well below peers. Management will also refrain from additional borrowings as it looks to improve cash to debt and debt to cash flow metrics following several debt financed initiatives since 2019. Atypical of multistate systems, revenues and cash flow will continue to be heavily concentrated in Florida. To...

AdventHealth Obligated Group (formerly Adventist Health System/Sunbelt Obligated: Update to credit analysis - Credit Opinion – 2021/10/20 – US$ 250.00 – ...AdventHealth (AH, Aa2 stable) will benefit from consistently strong operating cash flow (OCF) margins, large scale and still relatively low, albeit higher operating leverage following a rise in debt. This will help offset days cash that will remain solid but below peers. Following over a 30% increase in absolute debt since 2019 associated with several initiatives, including the acquisition of Redmond Regional Medical Center (Redmond), cash to debt and debt to cash flow metrics will be less favorable than historical levels. However, these metrics will likely improve as management focuses on deleveraging. Atypical of multistate systems, revenues and cash flow will continue to be heavily concentrated in Florida. These highly competitive markets will be a key ongoing challenge, exacerbated by recent elimination of CON regulation in Florida. The Redmond transaction brings some risk as AH attempts to increase its presence in Georgia where it currently has very minimal assets. Sector-wide challenges...

Moody's assigns Aa2 to AdventHealth Obligated Group's (FL) Ser. 2021E; outlook stable - Rating Action – 2021/10/19 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

AdventHealth Obligated Group : Update to credit analysis - Credit Opinion – 2021/06/02 – US$ 250.00 – ...AdventHealth (AH, Aa2 stable) will benefit from strong operating cash flow margins, large scale and relatively low operating leverage as measured by debt to cash flow despite a recent increase in debt. This will help to offset cash metrics (including days cash and cash to debt) that will remain solid but below peers. AH increased debt levels in fiscal 2020 to help fund several initiatives including the system's conversion to a new IT system, and the 2020 purchase of minority ownership in Health First, which will expand AH's network into Brevard County, Florida. This follows the acquisition of four Florida hospitals from CHS in 2018 and 2019. Atypical of multistate systems, revenues and cash flow will continue to be heavily concentrated in Florida, where AH will increase its presence. Florida's highly competitive markets will provide a key risk to AH going forward; recent elimination of state CON regulations will exacerbate this risk. If finalized, AH's agreement to purchase Redmond Regional...

More from Moody's Global Credit Research

Moody's Global Credit Research—Moody's Investors Service, a leading global credit rating, research and risk analysis firm, publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Ratings also create efficiencies in fixed-income markets and similar obligations, such as insurance and derivatives, by providing reliable, credible, and independent assessments of credit risk. For issuers, Moody's services increase market liquidity and may reduce transaction costs.

About the Author


Cite this Report

  
MLA:
Moody's Global Credit Research. "AdventHealth Obligated Group (formerly Adventist Health System/Sunbelt Obl Grp) : Update to credit analysis" May 26, 2023. Alacra Store. Jun 15, 2024. <http://www.alacrastore.com/moodys-credit-research/AdventHealth-Obligated-Group-formerly-Adventist-Health-System-Sunbelt-Obl-Grp-Update-to-credit-analysis-PBC_1368367>
  
APA:
Moody's Global Credit Research. (). AdventHealth Obligated Group (formerly Adventist Health System/Sunbelt Obl Grp) : Update to credit analysis May 26, 2023. New York, NY: Alacra Store. Retrieved Jun 15, 2024 from <http://www.alacrastore.com/moodys-credit-research/AdventHealth-Obligated-Group-formerly-Adventist-Health-System-Sunbelt-Obl-Grp-Update-to-credit-analysis-PBC_1368367>
  
US$ 250.00
$  £  
Have a Question?

Any questions about the report you're considering? Our Customer Service Team can help! Or visit our FAQs.

More Research

Search all our Credit Research from one place.