Saturday, June 4, 2011

UMC financing remains wreathed in crippling uncertainty

Here's yet another piece in today's Times-Picayune where the story from Jerry Jones and Bobby Yarborough changes.

Now the UMC is ostensibly going to venture into the private bond market in search of bonds rated worse than "highly speculative" based on the current interim university hospital model:

The firm based its projections on UMC maintaining cash reserves equivalent to 100 days of expenses. That is well beyond the month-to-month operating capacity of the existing Interim LSU Public Hospital. Yet, analysts noted, that still trails the standards of bond ratings agencies. The median cash on hand for not-for-profit health care entities with BBB-rated debt, according to Moody's, is 121 days, Kaufman Hall said. The BBB rating is the bottom classification of debt rated "highly speculative," 15 steps short of a prime rating.

This makes the City Council's move to revoke the streets on Thursday look even less wise.

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