Adventist HealthCare (AHC), a medical system based in Gaithersburg, Maryland, United States, was assigned the favorable investment rating of BBB by S&P Global Rating in anticipation of the organization’s recently completed bond issue.
The rating “reflects AHC’s consistent operating performance, leading market position, and expanding geographic footprint, as well as modest but increasing balance-sheet strength,” the S&P report said. The rating agency emphasized Adventist HealthCare's “remarkably consistent operations” as a strong indicator of future stability.
“We are excited and encouraged that S&P has recognized the strength of our organization,” Adventist HealthCare president and CEO Terry Forde said. “We look forward to the positive impact the bond issue will have on our continued ability to advance our mission to provide world-class health-care services in our community.”
Adventist HealthCare issued a new series of tax-exempt bonds in October as part of the company’s plan to fund capital investments to upgrade facilities. A portion of the bond issue will fund the building of a new patient tower at Adventist HealthCare Shady Grove Medical Center. The 150,000-square-foot (almost 14,000-square-meter), six-story tower will feature all private patient rooms, a modern Emergency Department with private treatment bays, and a larger, replacement Intensive Care Unit. Bond revenue will also assist with the purchase of AHC’s corporate headquarters and the re-financing of long-term debt acquired in 2014.
In its report, S&P affirmed Adventist HealthCare’s “ability to generate consistently positive operations, despite pressure stemming from the pandemic and operating pressures, through recent large-scale projects and expansion.” In particular, the analysis noted AHC’s ability to increase cash flows and maintain operational excellence even while managing its US$400 million investment in its newly constructed Adventist HealthCare White Oak Medical Center, which opened in late 2019, shortly before health-care systems were challenged by COVID-19.
“We are grateful for team members and leaders across our system who have worked diligently to ensure that every decision contributes to Adventist HealthCare’s long-term financial viability,” James Lee, Adventist HealthCare executive vice-president and CFO, said.
The rating agency also pointed out that Adventist HealthCare’s emphasis on updating facilities across its system has resulted in a lower average age of plant, a future performance indicator viewed positively by S&P. “Our deployment of strategic capital for upgraded and new facilities will allow us to continue to support our mission and vision and will strengthen future operating performance,” Maureen Dymond, Adventist HealthCare vice-president of financial operations, said.
About Adventist HealthCare
Adventist HealthCare, based in Gaithersburg, Maryland, United States, is one of the longest-serving health systems in the Washington, D.C., region and one of the largest employers in Maryland. It includes Shady Grove Medical Center, White Oak Medical Center, Fort Washington Medical Center, Adventist HealthCare Rehabilitation, Home Care Services, Adventist Medical Group, Imaging, and Urgent Care. The organization’s stated mission is to extend God’s care through the ministry of physical, mental, and spiritual healing.