|Copyright:||(c) 2010 SourceMedia Inc, Source: The Financial Times Limited|
|Source:||Financial Times Limited|
“We will just do the shorter maturities and come back later this year or in 2011 to finish the fixed-rate refunding,” said
The fixed-rate refunding is for traditional present-value savings so the rising long-term rates have cut into savings. The variable-rate bonds will restructure outstanding auction-rate securities. Most borrowers with auction-rate securities restructured their debt after the ARS market collapsed in early 2008 as they saw rates skyrocket.
Aurora fortuitously linked the maximum rate it would pay to double-A rated commercial paper, so the system has seen little increase. “Even though we are not paying higher rates we want to restructure from a risk-management perspective,” O’Keefe said.
Ahead of the sale, Fitch Ratings affirmed Aurora’s A rating and
The system’s strengths include its 30% leading market share in a broad service area covering eastern
About 80% of system revenues were generated by a sizeable base of 1,430 physicians. The system also benefits from a conservative investment strategy and managed care contracts that carry long terms and provide revenue stability. No new debt is planned through 2013.
Challenges include modest cash levels that would cover operations for just 91 days, a large unfunded pension liability of
The system generated operating income of
“Despite competition, we continue to believe
Aurora has expanded to capitalize on growing areas, this year opening a new 110-bed hospital in
“As expected, profitability measures have softened in the year-to-date period as the corporation absorbs the start-up expense related to opening of the