Fitch Upgrades Essentia Health Credit Rating Ahead of Merger
Fitch upgraded Duluth, Minn.-based Essentia Health's credit rating to "A" from "A-" in a Nov. 11 report, citing the system's leading market position across its three-state service area and improved financial flexibility. Fitch said it expects Essentia's operating EBITDA margins to improve moderately over the medium term, driven by retail and specialty pharmacy growth, improved length of stay and throughput, workforce efficiency and expanded access. The upgrade comes ahead of Essentia's planned combination with Bloomington, Minn.-based HealthPartners, announced Sept. 29, which would create a 22-hospital nonprofit system with more than 135 clinics, 6,000 clinicians and about 45,000 employees operating under the HealthPartners name, with Essentia facilities retaining their name. The transaction is expected to take effect Jan. 1, pending regulatory approvals, and Fitch said it views the deal as neutral to Essentia's rating, which carries a stable outlook.