Fitch Affirms Trinity Health's (MI) Self-Liquidity Rating at 'F1 '
KEY RATING DRIVERS
STRONG FINANCIAL PROFILE: Fitch rates Trinity's long-term obligations at 'AA' with a Stable Outlook. The long-term rating reflects the strength of Trinity's geographically diverse delivery system, satisfactory profitability metrics, strong management practices, and adequate liquidity position. Additionally, Trinity's moderate debt burden continues to support solid debt service coverage.
LIQUID RESOURCES AVAILABLE FOR UNREMARKETED PUTS: The 'F1+' rating reflects the adequacy of Trinity's internal liquidity resources to meet optional and mandatory tenders presented by its variable-demand debt and CP programs. Such resources include cash; highly liquid, highly rated investments; and dedicated bank liquidity facilities. Investments are discounted based on Fitch's criteria. At Aug. 31, 2015, Trinity maintained highly liquid resources to cover the maximum mandatory put exposure on any given date in excess of Fitch's criteria of 1.25x.
RATING SENSITIVITIES
MAINTENANCE OF ADEQUATE LIQUIDITY: Fitch expects Trinity Health Credit Group to maintain adequate internal liquid resources to cover its total put exposure in excess of 1.25x to maintain the 'F1+' short-term rating.
CREDIT PROFILE
Trinity is one of the largest Catholic health care delivery systems in the U.S. Operating in 20 states, Trinity is composed of 86 hospitals, over 100 long-term care facilities and programs, and over 3,000 employed physicians. In fiscal 2014 (year ended June 30) Trinity generated total revenues of \\$13.6 billion.
'F1+' SHORT-TERM LIQUIDITY RATING
The 'F1+' rating reflects the adequacy of Trinity's eligible cash, investments, and dedicated lines of credit to fund any un-remarketed puts on its variable rate demand bonds and CP program. At Aug. 31, 2015, Trinity had a total of approximately \\$2.6 billion of highly liquid, unrestricted cash and fixed income securities, and dedicated working capital lines available. Trinity's eligible liquid resources available to its maximum tender exposure in any given week exceeds Fitch's 'F1+' threshold of 1.25x. Fitch received a written internal procedures letter from the organization, which outlines internal policies to meet any funding requirements. Fitch receives monthly investment reports, which are used to monitor Trinity's internal liquid resources relative to its cash and investment position relative to its funding exposure.
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