Australia: Ramsay Health Care assigned debut investment grade credit rating from Fitch

Fitch Ratings has assigned Ramsay Health Care a first-time BBB long-term foreign currency rating. The rating was based on the credit profile of Ramsay Funding Group, which consists of Ramsay and its wholly owned subsidiaries. It excludes Ramsay Sante, its European business, and some of its Australian pharmacy operations. The Outlook is Stable.

Fitch said that the rating reflects Ramsay’s “strong business profile, driven by its leading position in the Australian private healthcare sector and sizeable position in the UK, supportive regulatory frameworks and good visibility over the long-term growth potential of healthcare”. Ramsay provides health care through a global network of clinical practice, teaching and research, extending across 10 countries.

Ramsay CFO Martyn Roberts said: “Achieving this credit rating is a positive first step in our programme to diversify Ramsay’s sources of debt and extend and stagger the tenure.”

The company has said, generally, that it is looking to refinance debt, which is all relatively short-dated bank debt. Its 52.5%-owned European subsidiary Ramsay Sante recently refinanced its syndicated debt facility, in an exercise that extended maturities and linked interest payments to ESG targets, something that Ramsay may consider in the future.

Being assigned a credit rating is often a prelude to similar reviews from other ratings agencies and subsequent capital markets activity, but a spokesperson from Ramsay says that there are no additional ratings plans or bond issues at this stage.

“Fitch considers Ramsay’s credit on a wholly-owned funding group basis, which is consistent with the way we internally consider out credit as well as the way our bankers consider it,” said Ramsay in an email response to questions from HMi.

Ramsay has around A$1.4bn (US$1.08bn) of debt maturing in October 2022 and other maturities fall due in the following year.

HSBC acted as ratings advisor.