Fitch also affirms the 'BBB-' rating on the outstanding debt listed below. The Rating Outlook is Stable.
The series 2007A bonds will be issued as fixed-rate securities. Bond proceeds will be used to refund NYUHC's outstanding 2000B revenue bonds, fund capital projects at Tisch Hospital, refinance two taxable loans relating to NYUHC's Cancer Center, fund a capitalized interest period, fund the debt service reserve fund and pay for costs of issuance. The new money portion of the series 2007A bonds ($54.2 million) is a part of the additional $170 million of new debt that Fitch expected NYUHC to issue in 2007. NYUHC intends to issue the balance of $120 million later in 2007 to fund critical infrastructure and program projects. The series 2007A bonds are expected to sell the week of January 22 through negotiation led by Morgan Stanley & Co., Inc. and Citigroup Global Markets Inc.
The 'BBB-' rating is based on NYUHC's strategy as an independent institution, profitability in the New York City market, success of newly expanded clinical services, and clinical reputation and affiliation with NYU School of Medicine (NYSOM). Primary credit concerns are NYUHC's light liquidity, future capital plans, aging facility and future debt burden. NYUHC's close affiliation with the NYUSOM (not a member of the obligated group), including a shared Dean and CEO, adds to NYUMC's already strong clinical reputation. A new governance structure is being considered which could strengthen the existing relationship between NYUHC and NYUSOM.
