Fitch Ratings, as part of its ongoing surveillance efforts, has affirmed its 'A+' rating on Memorial Health Services' (Memorial) approximately $354 million of outstanding revenue bonds. In addition, Fitch affirms its 'F1+' short-term rating on Memorial's $142.1 million variable-rate demand bonds. The series 1991 and series 1994 variable-rate bonds are supported by Memorials' internal liquidity. The Rating Outlook is Stable.
The rating affirmation reflects Memorial's strong operating result in fiscal 2008 which was consistent with historical results and remains comparable with Fitch's 'A' rating category. Memorial posted an operating income of $55.3 million in fiscal 2008 (3.5% operating margin), up from the $52.5 million operating income (3.5% operating margin) in the prior fiscal year. However, first-quarter results (through Sept. 30) have been hampered by lower-than-budgeted patient volume and an unfavorable shift in payor mix.
