Update on Our Organization’s Finances

This week, both Moody’s and S&P Global released bond rating reports related to our upcoming bond financing. Similar to a personal credit ”score“ maintaining a strong bond rating from these agencies allows Carilion Clinic to access capital markets at favorable interest rates, which is essential for funding our long-term projects. 

• S&P affirmed our AA-/Stable rating.
• Moody’s affirmed our Aa3 rating, while adjusting the outlook to Negative from Stable

In their analysis, S&P wrote: “The stable outlook reflects our view that Carilion will maintain its enterprise profile strengths while continuing its current trend of financial performance improvement.” Moody’s commentary followed the same line of thinking, while explaining the adjustment to the outlook as reflecting “the modest pace of operating cash flow improvement” and considerations such as the health system’s large capital budget through FY27 that will “temper cash growth from operations” and uncertainty around federal changes to Medicaid eligibility and related state directed payment programs.

Hospitals and health systems across the country continue to face challenges with high labor and benefits costs, rising cost of supplies, and increased capital spending to renovate and expand facilities to continue meeting the needs of communities they serve.

Our goal is to finish FY25 with a positive operating margin, and we are on track to meet that goal.

“The latest bond ratings show that Carilion remains strong as a healthcare system and as the largest employer in our region,” said Don Halliwill, Carilion Clinic’s Chief Financial Officer. “Our strong financial health enables us to continue investing in top-tier talent, cutting-edge technology and state-of-the-art facilities, all of which are essential to providing high-quality care to the patients and communities we serve.”