RATING SENSITIVITIES CONTINUED SOLID FINANCIAL PERFORMANCE: Stanford Health Care's overall financial profile is solid and financial performance is expected to remain in line with 'AA' category medians.
There may be near-term softening of certain liquidity metrics due to the remaining funding of its master facility plan, but is expected to be temporary.
STRONG PHILANTHROPIC TRACK RECORD: SHC's fundraising is coordinated with Stanford University and the philanthropic base is deep.
To date, SHC has raised over 0 million for the new hospital and 7 million has been received in cash.
KEY RATING DRIVERS GOOD FINANCIAL PROFILE: SHC's financial performance has been consistent over the last four fiscal years (Aug.
31 year ended) with strong operating profitability, good liquidity, and solid debt service coverage.
Operating performance is weaker through the nine months ended May 31, 2016 due to a slight deterioration in payor mix; however, profitability is still adequate for the rating level.
RELATIONSHIP WITH STANFORD UNIVERSITY: Fitch views SHC's close and collaborative relationship with Stanford University (rated 'AAA'; Outlook Stable) and Lucile Packard Children's Hospital (rated 'AA'; Outlook Stable) as positive credit factors.