Summary: Washington Health Care Facilities Authority Virginia Mason Medical Center

Virginia Mason Medical Center Primary Credit Analysts: Stephen Infranco, New York, (1) 212-438-2025; stephen.infranco@spglobal.com Ken W Rodgers, New York, (1) 212-438-2087 The downgrade on Washington Health Care Facilities Authority's bonds, issued for Virginia Mason Medical Center (VMMC), reflects: Poor financial performance, with fiscal 1999 results expected to generate negative margins after onetime adjustments, in addition to the preceding years loss of $12 million; A limited balance sheet, with current liquidity at 61 days' cash on hand and 46% cash-to-total debt; A competitive market in downtown Seattle; and Thin coverage of maximum annual debt service. The rating is supported by: VMMC's unique market position, with a physician-led clinic providing over one million annual outpatient visits, and a premier tertiary hospital and

...The downgrade on Washington Health Care Facilities Authority's bonds, issued for Virginia Mason Medical Center (VMMC), reflects: + Poor financial performance, with fiscal 1999 results expected to generate negative margins after onetime adjustments, in addition to the preceding years loss of $12 million; + A limited balance sheet, with current liquidity at 61 days' cash on hand and 46% cash-to-total debt; + A competitive market in downtown Seattle; and + Thin coverage of maximum annual debt service. The rating is supported by: + VMMC's unique market position, with a physician-led clinic providing over one million annual outpatient visits, and a premier tertiary hospital and referral center providing over 16,000 admissions; + A wide geographic draw, with over 30% of VMMC's patients coming from outside the Seattle metropolitan area; and + A manageable debt burden of 3% of total revenues. The bonds are secured by VMMC's gross revenue pledge. VMMC continues to experience weaker financial performance....

Summary