KBRA Affirms BBB-, Stable Outlook on Westchester County Health Care Corporation, NY Revenue Bonds
18 Dec 2025 | New York
KBRA affirms the long-term rating of BBB- on Revenue Bonds issued by the Westchester County Local Development Corporation, NY on behalf of Westchester County Health Care Corporation (the "Corporation"). The Outlook is Stable.
Master Trust Indenture (MTI) Obligations, including Revenue Bonds, are secured by a pledge of Gross Receipts of the Members of the Westchester Medical Center Obligated Group (the “Obligated Group”) and a Mortgage on the Corporation’s leasehold interest in the Lease Agreement with the County of Westchester (the “County”), as described below, and its fee interest in MidHudson Regional Hospital. Each series of Revenue Bonds is issued pursuant to a series specific Indenture and are further secured by (a) certain funds and accounts established under each Indenture and (b) by a series specific Obligation issued under the MTI by and among Members of the Obligated Group and the Master Trustee.
The Corporation, which does business as WMCHealth, is a New York public benefit corporation, established in 1997, for the sole purpose of assuming operation of the County's Department of Hospitals. Today it operates the Westchester Medical Center (the “Medical Center”), which includes the Main Hospital in Valhalla, NY and MidHudson Regional Hospital, located in Poughkeepsie, NY. The Corporation is also the majority corporate member (60.0% economic interest) of Bon Secours Charity Health System (BSCHS) and the sole member and active parent of HealthAlliance. A Lease Agreement between the Corporation and the County expires on Dec. 31, 2057, after final maturity of all outstanding Revenue Bonds. The Corporation retains the right to extend the Lease Agreement for three additional 10-year terms and one additional 5-year term.
At present, the Corporation is the only member of the Obligated Group, which essentially encompasses the Valhalla and Poughkeepsie campuses of the Medical Center only. Other Medical Center subsidiaries, BSCHS and HealthAlliance, are non-obligated entities that sit outside the Obligated Group.
The rating was action reflects 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 upon the Corporation’s ability to leverage the breadth of WMCHealth to generate stable operating cash flows and sufficient DSC. The Stable Outlook further assumes that recent operational initiatives including the implementation of new EHR system designed to ensure durable, lasting financial improvement will be successful and on budget, leading to moderating leverage and improving liquidity over time.
A Surveillance Report will follow.
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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