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.
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.
Thoughts About a Governance Downgrade
Fitch Ratings recently downgraded the United States’ long-term rating. Healthcare confronts a different manifestation of the same pressures confronting the U.S., and the lesson for leaders is that governance and planning systems matter.
The Quest for Soft Landings
For the Federal Reserve, a soft landing means we arrive at the 2% inflation target without a recession. For healthcare, a soft landing is operating and investment entity recovery that stabilizes credit positioning and facilitates capital formation.
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.
Resource Positioning and the 2023 Debt Ceiling Agreement
Current Funding Environment IU Health (Aa2/AA/AA), AdventHealth (Aa2/NR/AA), Banner Health (NR/AA-/AA-), and Arkansas Children’s Hospital (A1/AA-/NR) came to market this week with...
Financial Reserves Build Institutional Resilience for Colleges and Universities
Anyone unfamiliar with the financial structure of not-for-profit colleges and universities may question why these organizations often carry significant financial reserves on their...