Dartmouth-Hitchcock Obligated Group is expected to issue $138.9 million in 2009 revenue bonds. Fitch Ratings Insurance Group awarded A+ ratings to the bonds, which are being issued through the New Hampshire Health and Education Facilities Authority. Fitch announced Thursday in a statement.
DHOG consists of the Dartmouth-Hitchcock Medical Center, as well as two hospitals in Vermont and Massachusetts.
Fitch also reaffirmed its A+ rating for the $310.8-million in outstanding debt that DHOG has issued to individuals through various investment agencies, including the New Hampshire Health and Education Facilities Authority, the Massachusetts Health and Educational Facilities Authority and the Vermont Educational and Health Buildings Financing Agency. DHOG issues bonds through these agencies because it lacks its own investment company.
"The A+' rating reflects DHOG's reputation and status as the leading provider of high acuity services in a broad geographic region that spans from the greater Boston area to the Canadian border leading to a sound credit profile that is consistent with Fitch's A' category medians," Fitch's statement said.
An A+ rating is the third-highest possible rating by Fitch.
Representatives for Fitch and DHMC were not available to comment by press time.
DHOG was last rated in 2006, when the group issued $53.125 million in bonds. Fitch gave the group an A+ rating in 2006 as well, although the current statement said that Fitch's analysts felt DHOG had improved in its credit stability.
"DHOG's operating profitability has improved over the last two and one-half fiscal years reflecting the successful realization of its broad based strategies to ensure health services are provided in the most effective and efficient manner and in the most appropriate provider location," the statement read.
DHOG has made some recent organizational changes that have improved its credit stability, including the May establishment of Dartmouth-Hitchcock Health, a collaborative health-care system in New Hampshire and Vermont. Dartmouth-Hitchcock Clinic also signed an affiliation agreement with the Catholic Medical Center in Manchester, which was announced in July.
The Fitch statement said that their analysts viewed these changes "favorably," feeling that both decisions had increased DHOG's credit stability.
Fitch's statement said that two major factors contributing to DHOG's positive ranking were the wide range of high-tech services they provide, meaning that they are less vulnerable to health-care reform and economic fluctuation, and the group's "close affiliation" with the College.
The Fitch statement said that analysts had some concerns about DHOG's balance sheet position and light liquidity, but that the DHOG administration's recent moves to improve the liquidity situation have been relatively successful and are a cause for confidence that the group's fiscal situation will continue to stabilize.
DHOG reported annual revenues of $1.3 billion in the fiscal year 2008.
DHOG issues bonds independently from the College and professional schools, including Dartmouth Medical School. In May, the College announced plans to issue more than $400 million in bonds to pay for campus construction projects and fund a cash reserve. In the wake of that announcement, Standard & Poor's, another rating firm, downgraded the College's credit rating to double-A plus, the second highest rating, from its prior triple-A status, Adam Keller, Dartmouth executive vice president for finance and administration, told The Dartmouth at the time.
