The Balance Sheet Buffer
Balance sheet strength has buffered consumers and businesses from some of the restrictive shock of higher rates. With a relatively brittle revenue model in healthcare, the focus becomes whether, when, and how to restructure operations as balance sheets are spent down.
Downgrades and the Rating Sword of Damocles
The number of not-for-profit hospital rating downgrades has escalated in 2023, suggesting that benefit of the doubt is running out. Hospitals will need to go the extra mile when preparing material for their rating agency meetings.
External Capital Formation in a Higher Rate Environment
After years of monetary tingle, a more restrictive stance from the Federal Reserve is creating a chill. A sustained higher interest rate environment may require finance teams to rethink external capital formation strategies.
Financial Reserves and Strategic Financial Planning
Financial reserves are essential to the sustainability of any college or university. Integrating reserve goals to strategic planning through development of a strategic financial plan helps ensure that sufficient reserves will be available to meet the institution’s needs.
Inside Rating Committee: Five Things to Know
The rating committee is central to the rating process: all rating decisions are made by the committee, not an individual. In her new blog, Lisa Goldstein identifies five things to know about what happens in a rating committee.
Hitting the Reset Button – The Sequel
As organizations prepare for rating agency presentations, financial performance will continue to occupy much of the agenda. But analysts also will want an update on long-term strategies as performance stabilizes and the industry resets to a new status quo.
Rating Agency Update: Covenants, Consolidation, and Capital Spending
Kaufman Hall hosted its 2023 Summer Rating Agency Update on July 12, featuring Eva Bogaty, Associate Managing Director at Moody’s Investors Service, Suzie Desai, Senior Director at S&P...
What to Expect When a Consultant Call-in Report Is Required
In the event of a covenant breach, management typically must hire an independent consultant to identify areas for financial and operational improvement. Find out what a consultant call-in does and does not entail, as well as considerations for timing and implementation.
From Incremental to Multivariable Management
The challenges facing health system leaders today are so diverse, interconnected, and relentless that an incremental management approach won’t work. The best response is grounded in simultaneous and tightly integrated efforts across multiple areas of focus.
Financial Reserves and Credit Management in Higher Education
Issuance of tax-exempt debt is one of the most affordable ways for institutions to finance large capital projects. The affordability of debt is partly contingent on an institution’s credit rating, and unrestricted financial reserves are a significant component of that rating.
The Sky Is Orange and the Bottom Line Is Red
The maintenance of financial reserves is critical in rating committee during difficult times. Management teams that have outlined a credible plan to create financial durability and have built liquidity are best positioned for today’s harsh environment.