A hospital network based in Hackensack, New Jersey, issued $400 million in taxable commercial paper notes to finance general corporate needs.
The notes, sold by Hackensack Meridian Health (HMH), mature within nine months. They received a rating of F1+ from Fitch Ratings and A-1+ from S&P Global Ratings.
HMH’s revenue grew rapidly last year. It reached $7.8 billion in fiscal year 2023, a 15% increase from FY 2022, according to the network’s financial statements.
Fitch analysts said they view “the return to stronger operating results as sustainable, and solidly ahead of the slightly lower profitability marked by the various waves of the coronavirus pandemic, initially lower volumes, and the attendant inflationary factors affecting staffing and supply chain costs.”
Hackensack’s revenue could grow even more if it wins a lawsuit that it filed against the U.S. government in July, days after the Supreme Court struck down so-called Chevron deference. The Chevron doctrine held that federal agencies have the authority to interpret vague statutes; the court could defer to the agencies.
In a suit filed last month against Secretary of Health and Human Services (HHS) Xavier Becerra, HMH argues that it is owed more in federal reimbursements for serving low-income patients; the suit is based on the definition of a low-income patient, previously determined by HHS, a federal agency.
HMH operates 17 hospitals that are home to almost 5,000 patient beds. The notes are general obligations of the hospital network, backed by its revenue.
BofA Securities, Inc served as dealer for the notes.