Fitch Ratings Affirms Cape Cod Healthcare at ‘AA-’
(HYANNIS, MA (May 12, 2023) Fitch Ratings, Inc. has affirmed an issuer default rating (IDR) for Cape Cod Healthcare (CCHC) at ‘AA-’. The rating is maintained from the agency’s previous rating for CCHC in 2022. The Fitch Rating Outlook for CCHC is “stable” as referenced in its ratings report released on May 4, 2023. “The ‘AA-‘ IDR is supported by CCHC’s strong financial profile, reflecting favorable adjusted leverage metrics in Fitch’s forward-looking stress scenario, given the system’s strong balance sheet and light leverage. In addition, CCHC’s dominant market position in the Cape Cod service area and its historically solid operating results support the rating,” Fitch Ratings said in the press release.
Fitch continues to recognize that financial performance over the last two fiscal years was lower than historical trends, but expects that operating margins should gradually return to pre-Covid levels and notes expense reduction efforts are in place. The analysis included CCHC’s new patient tower project and upgrade of several existing areas at Cape Cod Hospital, noting the total project cost of $185 million is being funded with internal cash flow and philanthropy, without the need to issue debt. “Fitch believes the organization has sufficient balance sheet capacity, which includes funds already raised toward the building project, to fund the project while maintaining the ‘AA-’ rating,” according to the report.
“The Fitch affirmation is confirmation that we are right on track as we prepare for and invest in our future,” stated Rich Silveria, Chief Financial Officer for Cape Cod Healthcare. “The patient is at the center of all we do, and we remain steadfast in our commitment to this community, expanding ways to provide convenient access to high-quality, leading-edge care for all who live on or visit Cape Cod. A strong financial profile ensures that we can continue to accomplish these goals.”
Fitch also noted CCHC’s several affiliations with tertiary providers, such as Dana-Farber Cancer Institute and Beth Israel Lahey Health, which have increased patient access to specialized care on Cape Cod. Additionally, it cites how the clinical offerings and dedicated space in the new patient tower project at Cape Cod Hospital will strengthen CCHC’s cancer program. Fitch also highlighted that the organization will complete the certification process for Level III trauma designation in June 2023, further increasing patient access to services.
