KBRA Affirms BBB-, Stable Outlook on Westchester County Health Care Corporation, NY Revenue Bonds
5 Dec 2024 | New York
KBRA affirms the long-term rating of BBB- on Revenue Bonds, Series 2023 (Westchester Medical Center Obligated Group Project) issued by the Westchester County Local Development Corporation, NY on behalf of Westchester County Health Care Corporation ("the Corporation"). The Outlook is Stable.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Essential, high acuity service provider, with an expansive scope that facilitates net patient revenue generation.
- Adequate, generally stable operating cash flows supporting repayment of debt.
- Manageable future capital needs, none of which are expected to be debt financed.
Credit Challenges
- Heavily leveraged balance sheet, largely reflecting the capital intensive nature of operations.
- Considerable reliance on governmental payors, which limits the Corporation’s ability to improve margins.
- Weak unencumbered liquidity.
The Stable Outlook is predicated on the Corporation's ability to leverage the breadth of WMCHealth to generate stable operating cash flow and debt service coverage. The Stable Outlook further assumes that recent operational initiatives designed to ensure durable, lasting financial improvement will be successful, leading to moderating leverage and improving liquidity over time.
Rating Sensitivities
For Upgrade
- Sustained, strengthening of operating performance leading to increased liquidity and moderating leverage.
- While not expected, fundamental changes in how governmental payors reimburse providers for care.
For Downgrade
- Declining patient volumes, which reduce the Corporation’s ability to maximize net patient revenues.
- Additional debt issuance without a commensurate increase in resources available for repayment.
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