Cleveland Clinic Health System saw its bond rating of more than $1 billion in debt lowered to A1 from an Aa3 by Moody's Investors Service. Moody's cited a "significant decline in unrestricted and restricted liquidity to levels that place inordinate pressure on ongoing cash flows," heavy capital obligations and a $361 million commitment to fund pensions between 2003 and 2006. The system's cash on hand was $455 million, or 59 days, in July 2002, compared with more than $1 billion, or 170 days, in December 1999, Moody's said. Reduced international patient business, stock market losses and rising malpractice insurance premiums also have contributed to the declining balance sheet. The Cleveland Clinic system lost $24 million on operating revenue of $2.9 billion in fiscal 2001, excluding special charges and one-time gains. Working in the system's favor is its strong local market position, good reputation internationally and revenue growth of 8% in fiscal 2001 and 14% in fiscal 2000, partly because of market consolidation, Moody's said. -- by Mark Taylor
Cleveland Clinic system's bond rating lowered
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