Moody’s, Fitch weigh in on Tampa General expansion plans
September 24, 2020 - Moody's Investors Services has downgraded its rating on debt held by Tampa General Hospital. The credit agency downgraded the rating from A3 to Baa1 with a stable outlook. Both are investment-grade ratings although the Baa1 rating has "moderate risk," according to Moody's. Moody's also assigned a Baa1 rating to Tampa General's proposed new debt, three bond issues totaling $569 million. The new debt will be used fund large capital projects that will drive increases in inpatient, outpatient and surgical volumes, boosting revenue and strengthening profitability, Moody's said in a Sept. 16 report. But the construction work won't be completed until 2025 and there are uncertainties related to Covid-19, the report said. In a separate report, Fitch Ratings said most of the new projects are accretive to Tampa General's operating performance and that "ample and stable cash flow will allow TGH to steadily rebuild its balance sheet to offset the additional debt." Fitch also cited Tampa General's strong and growing market position and an enhanced collaboration with the University of South Florida School of Medicine. Fitch assigned an A rating to the new debt, affirmed the A rating on existing debt and upgraded Tampa General's outlook to positive from stable.