Semc Japan Driver

  

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has upgraded to 'AA' from 'AA-' the rating on the following bonds issued by the Kentucky Economic Development Finance Authority on behalf of St. Elizabeth Medical Center (SEMC):

--$93,575,000 fixed rate bonds, series 2009A;

SEMC has a floating-to-fixed-rate swap with a total notional value of $34.9 million with Merrill Lynch as counterparty. The mark to market for the swaps was negative $3.7 million as of June 30, 2013. List of maintainers and how to submit kernel changes: Please try to follow the guidelines below. This will make things: easier on the maintainers. Not all of these guidelines matt. SEMC (AEC+CLM-BSP) - Brunei, Bhutan, Maldives, Nepal, Afghanistan, Mongolia, Timor-Leste, Cambodia, Laos, Myanmar Potential Security Impact: In HP consumer notebooks, the warranty period for both the computer and the battery may vary by country. Available on-demand. We invite you to join our online event on Smart Electric Motor Control together with our supplier partners Xilinx, Trenz and ON Semiconductor. Electric motors keep industries running - from compressors, pumps and conveyors to motion systems and ventilator.

--$33,700,000 variable rate bonds, series 2009B.

For the series 2009B bonds, this is an underlying rating.

The Rating Outlook is Stable.

SECURITY

The bonds are secured by a revenue pledge of the hospital and a negative mortgage pledge.

KEY RATING DRIVERS

CONTINUED FINANCIAL STRENGTHENING DRIVES UPGRADE: The upgrade to 'AA' from 'AA-' reflects the consistent, year over year improvement in SEMC's financial profile and performance, which has resulted in financial metrics that well exceed most of Fitch's 'AA' category medians.

EXCELLENT MARKET POSITION: SEMC is the sole acute care provider in its primary service area of Northern Kentucky following the acquisition of its only competitor in 2008.

STRONG OPERATING RESULTS: SEMC's profitability in the last three fiscal years has been very good, with operating and operating EBITDA margins averaging 7.6% and 13.9%, respectively. While there was some weakening through the 2013 interim period driven by lower than expected volumes, profitability metrics remain very strong.

CONTINUED LIQUIDITY GROWTH: SEMC's unrestricted cash and investments increased to $571.3 million at June 30, 2013 from $453.9 million at June 30, 2012. SEMC's cushion and cash to debt ratios at June 30, 2013 of 60.7x and 448.9% are the strongest in Fitch's 'AA' category peer group.

OUTSTANDING DEBT SERVICE COVERAGE: Supported by a light debt burden, debt metrics far exceed Fitch's medians. Coverage of maximum annual debt service of 16.0x in 2012 and 15.2x in 2011 are considerably stronger than the median of 5.0x. MADS as a percentage of revenue is very low at 0.9% against the median of 2.9%.

HEIGHTENED BUT MANAGEABLE CAPITAL PLANS: Capital spending in the next five years is budgeted at 154% of depreciation expense, compared to the average of 110.8% in the last four fiscal years. Given SEMC's strong cash flow and balance sheet, Fitch believes there is plenty of room at this rating level to sufficiently fund the expenditures either through cash flow or debt issuance.

RATING SENSITIVITY

FINANCIAL STABILITY EXPECTED: Given SEMC's history of strong cash flow generation, projected profitability, manageable capital plans, and market position, Fitch expects the overall financial position to be maintained in the foreseeable future.

CREDIT PROFILE

Semc Japan Driver

Saint Elizabeth Medical Center, Inc. consists of Saint Elizabeth Hospitals, St. Elizabeth Physicians and other health care related entities. The organization has facilities in Covington, Edgewood, Florence, Fort Thomas, Falmouth and Williamstown, KY, with additional outpatient and ancillary services throughout Northern Kentucky. Saint Elizabeth has approximately 1,200 licensed beds and more than 800 physicians on staff. Total operating revenue in fiscal year ended (FYE) Dec. 31, 2012 was $977.2 million.

EXCELLENT MARKET POSITION

SEMC is the dominant regional provider of acute care services in Northern Kentucky with an inpatient market share of over 81%, which has held steadily over 80% since the acquisition of its main competitor in 2008. SEMC employs more than 95% of the primary care physicians in its service area and has an excellent reputation for quality. The hospital is well positioned to compete in the greater Cincinnati/Northern Kentucky market which includes a number of strong hospital systems.

SEMC continues to invest in a targeted growth strategy, with service lines and geographic locations carefully selected based on expected return on required investments and growth potential. Management is planning further investment in orthopedics, neurosciences, and urology to grow service lines and stem outmigration into the Cincinnati area.

CONTINUED GROWTH IN LIQUIDITY

Supported by excellent cash flow and manageable capital spending, unrestricted cash and investments grew to $571.3 million at June 30, 2013 compared to $511.9 million at FYE 2012 and $431 million at FYE 2011. Days cash on hand of 240.5, cushion ratio of 60.7x, and cash to debt of 448.9% compare very well against the 'AA' medians of 254.3 days, 23.4x, and 173.6%.

Semc Japan Driver Portal

STRONG OPERATING RESULTS

Semc Japan Driver License

Profitability in fiscal 2012 was very strong, posting operating and operating EBITDA margins of 7.9% and 13.9% compared to Fitch's 'AA' medians of 4.2% and 11.8%. Profitability in 2011 and 2010 were similarly robust, and has been supported by steady growth in utilization and rate increases. Profitability weakened somewhat through the six-month interim period ended June 30, 2013, but remains robust with 4.8% operating margin and 11.1% operating EBITDA margin. Management is working with an external consultant to review SEMC's cost structure and reduce expenses. A four-year target of $87.4 million of expense reductions has been identified, and SEMC expects to exceed its goal in 2013.

INCREASE IN CAPITAL SPENDING

Capital spending is expected to rise in the next few years, as SEMC executes its expansion plans and updates its facilities. Capital spending as a percentage of depreciation is projected to be 154% for the next five years ($79-99 million), compared to 101-124% in the last four years. Up to $150 million of projects may be financed with new debt. Given historical level of debt and cash flow, and liquidity position, Fitch believes future capital plans are manageable whether SEMC chooses to spend cash or issue debt to fund projects.

CONSERVATIVE DEBT PROFILE AND SOLID DEBT METRICS

At June 30, 2013, SEMC had $127.3 million in long-term debt outstanding, consisting of $93.6 million of series 2009A fixed rate bonds and $33.7 million series 2009B variable rate bonds secured by a Letter of Credit from JPMorgan Chase. Late September 2013, the series 2009Bs will undergo a liquidity substitution to replace the LOC with a standby bond purchase agreement from US Bank. The initial term of the SBPA will run to September 2018. Debt mix of 74% fixed and 26% floating is relatively conservative and is viewed favorably.

SEMC's leverage and coverage metrics are very strong, due to the light debt burden. In fiscal 2012, MADS as a percentage of revenue was 0.9% and debt to capitalization was 18.8% compared to the medians of 2.6% and 32.7%. Due to strong cash flow and low MADS, coverage was very good at 16.0x in 2012 and 15.2x in 2011 compared to the median of 5.0x. Despite lower profitability in 2013, coverage was still well in excess of the median at 13.6x.

SEMC has a floating-to-fixed-rate swap with a total notional value of $34.9 million with Merrill Lynch as counterparty. The mark to market for the swaps was negative $3.7 million as of June 30, 2013. SEMC is not required to post collateral at the current rating level.

DISCLOSURE

The hospital has covenanted to disclose annual results within 180 days of year-end and quarterly results within 60 days of quarter-end to bondholders through the Municipal Securities Rulemaking Board EMMA system.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Revenue Supported Rating Criteria', June 3, 2013;

--'Non-Profit Hospital and Health System Rating Criteria', May 20, 2013.

Applicable Criteria and Related Research:

Not-for-Profit Hospitals and Health Systems Rating Criteria Outside the United States

Revenue-Supported Rating Criteria

Semc Japan Driver Jobs

Additional Disclosure

Semc Japan Driver Training

Solicitation Status

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.