UW Hospital gets favorable bond ratings

Two of the nation’s most noted investment rating agencies have given high ratings to the revenue bonds recently issued by UW Hospital and Clinics.

Citing the hospital’s “reputation for clinical excellence”, “strong leadership team” and “sustained turnaround in operating performance,” Moody’s Investors Service has assigned an “A1” rating to the hospital’s two series of 2002 bonds. The A1 rating reflects the Service’s opinion that the hospital is financially strong and stable and is highly likely to meet its obligations to bondholders.

Similarly, Standard & Poor’s (S&P) earlier this month assigned an “A” rating to the hospital’s bonds. S&P said the outlook is positive, citing the hospital’s role as “one of the premier health care providers in the state of Wisconsin.”

Investment ratings are designed to assess the creditworthiness of bonds and other financial instruments. Under the terms of the legislation that created the hospital public authority in 1996, UW Hospital can issue bonds for a variety of purposes such as new construction, expansion, and remodeling of current space.

The proceeds from the current $68.5 million bond issue will be used to construct a new Emergency Department, relocate the Med Flight helicopter landing area, and remodel and expand a number of other hospital and clinic areas.

In fiscal year 2002, UW Hospital had more than 19,000 inpatient admissions and an operating budget of $500.4 million. It is the primary teaching site for the University of Wisconsin Medical School, whose more than 800 faculty provide patient care there.

“We are pleased with the high ratings from both Moody’s and S&P,” says chief financial officer Gary Eiler. “In the past year, we have taken a number of steps to enhance our financial performance. This benefits our employees, by making UW Hospital a more stable employer, as well as the community that needs the level of clinical expertise we offer.”