FOR IMMEDIATE RELEASE: December 9, 2009
Contact: Joan Shnipper (jshnipper@umm.edu)
410-328-6776
Karen Warmkessel (kwarmkessel@umm.edu) 410-328-8919
UNIVERSITY OF MARYLAND MEDICAL SYSTEM RECEIVES UPGRADED BOND RATING FROM MOODY’S INVESTORS SERVICE
11-hospital nonprofit system remains financially strong despite nation’s economic woes
The University of Maryland Medical System has received an upgraded bond rating, to “A” from “A-,” from Moody’s Investors Service as the 11-hospital private, nonprofit system prepares for a $250 million bond sale this month. Two other major bond-rating agencies, Fitch Investors Service and Standard & Poor’s, also have affirmed the medical system’s “A” rating with a stable outlook.
“The rating upgrade from Moody’s is an important achievement for the University of Maryland Medical System, especially in these very challenging economic times,” says Robert A. Chrencik, president and chief executive officer of the University of Maryland Medical System (UMMS). “Not only will this higher bond rating reduce our interest rates, it is a strong affirmation of our strategic direction and excellent financial performance. It also reflects our board of directors’ outstanding leadership and the strength of our partnership with the University System of Maryland, in particular, the University of Maryland School of Medicine.”
“It’s always an accomplishment to be upgraded, and we’re very pleased that all three major bond-rating agencies have given us an “A” rating, especially at a time when many other nonprofit hospitals have seen their credit downgraded,” Chrencik adds.
“These decisions by bond-rating agencies are based on an assessment of the entire institution,” Henry J. Franey, UMMS’ senior vice president and chief financial officer, says. “The ratings reflect the performance of our staff, the medical system’s leadership and the quality of our academic and health care programs as well as the effectiveness of our financial and business operations.”
In a recent special report, Moody’s Investors Service noted that many more hospitals and health systems had seen their credit rating downgraded in the last 12 months than had received upgrades.
According to Moody’s, hospitals that won credit upgrades had strong management and governance practices. These hospitals focused on reducing expenses, growing their service lines, expanding into new services and improving financial performance. They also maintained “very conservative” investment policies.
The University of Maryland Medical System is a private, nonprofit network of 11 academic, community and specialty hospitals throughout Maryland, with more than 15,000 employees and nearly $2.5 billion in annual revenue. It is the third-largest private employer in the Baltimore metropolitan area.
The upcoming $250 million bond sale will be used to expand and upgrade facilities and enhance patient services at many of the hospitals within the system as well as to provide funds for a comprehensive electronic medical records system.
The University of Maryland Medical System includes the University of Maryland Medical Center, Kernan Orthopaedics and Rehabilitation Hospital, University Specialty Hospital, Maryland General Hospital, Baltimore Washington Medical Center, Shore Health System (Memorial Hospital at Easton and Dorchester General Hospital in Cambridge), Chester River Health System and Mt. Washington Pediatric Hospital, which is jointly owned with the Johns Hopkins Health System. In July, UMMS entered into a strategic affiliation with Upper Chesapeake Health System that is expected to lead to a full merger by 2013. Upper Chesapeake Health includes Upper Chesapeake Medical Center in Bel Air and Harford Memorial Hospital in Havre de Grace.
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