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INTEGRIS Health, OK (OK)

CUSIP: 45834QAB5

By &Evergreen Team•Updated: Nov 18, 2025
NRCautious

Overview

•Bond Name/Type: INTEGRIS Baptist Medical Center, Inc. – Taxable Health-Care Revenue Bonds, Series 2020A (and parity Master Indenture debt)
•Top-Line Classification: Cautious (medium confidence)
•Synopsis: Three mandatory‐tender/put events totaling ≈$275 million fall between Oct–Dec 2025 (Signals 11, 13, 15, 17), while a just-issued $100 million direct-placement bond ((Oklahoma Health Care Authority 2024 06 GSAFAC 0000363157; 2025-11-14)) lifts pro-forma debt and compresses liquidity that may also be needed to absorb a potential $140 million CMS-DSH settlement ((Oklahoma Health Care Authority 2024 06 GSAFAC 0000363157; 2025-11-14)). All exposures mature or can crystallise inside the next 12 months, raising near-term refinancing and cash-deployment risk under a covenant that is only a 1.10× performance floor.

Rationale

Baseline (Foundation Analysis)
•Structure: parity Master Indenture, performance-floor DSC covenant (1.10×) with no automatic rate reset; issuer bears revenue shortfall risk.
•Historical headroom: 3.0–5.7× DSC and 244 DCOH (FY 2020).
•Primary risks: revenue volatility and expense control; no reserve fund; liquidity is the main shock absorber.
Theme 1 – Refinancing Concentration in 4Q 2025
•Signals 11, 13, 15 reveal three separate mandatory tenders/short maturities (Series 2019A, 2020D, 2024A) that together require take-out financing or internal cash within 11-13 months. Unlike routine amortisation, these puts were not identified in the 2020 base-case and thus constitute a departure from the foundation baseline.
•(Oklahoma Health Care Authority 2024 06 GSAFAC 0000363157; 2025-11-14) layers additional remarketing risk on Series 2020B/C; failure would accelerate principal three years after a failed attempt but still increases market-access dependency.
•Materiality path: Debt/Leverage | Liquidity. The Master Indenture offers no automatic source of funds other than system cash; therefore the risk is un-mitigated by structure.
Theme 2 – Incremental Leverage
•(Oklahoma Health Care Authority 2024 06 GSAFAC 0000363157; 2025-11-14) documents a $100 million privately placed Series 2024A borrowing. While coverage margin (≈3× vs. 1.10× covenant) preliminarily satisfies the Additional Bonds Test, it raises total bullet/put exposure in the same horizon cited above. Peer benchmarking in the foundation put debt/capital at 33 %; the new issue moves the metric modestly higher but remains within peer norms, tempering but not eliminating concern.
Theme 3 – Contingent Legal Liability
•Signals 14 and 16 confirm an unresolved CMS DSH dispute: current liability still $48 million and potential adverse settlement ≈$140 million. This was not highlighted as a baseline exposure in 2020 and therefore represents an emergent, un-budgeted drain on unrestricted cash—again funnelling through the Liquidity materiality path.
Red Flags
•Clustered 2025 puts with no identified refunding plan (Signals 11, 13, 15).
•Sizeable single-event legal exposure ((Oklahoma Health Care Authority 2024 06 GSAFAC 0000363157; 2025-11-14)) that would land on the same liquidity pool required for debt puts.
Signal weighting: board/issuer disclosures (Signals 10–17) outrank all other evidence and drive classification.

Outlook

Base-case: System DSC expected to remain comfortably above the 1.10× floor, but unrestricted cash will be the sole buffer against a coincident $275 million tender wall and any DSH settlement. Absent a proactive refunding, internal liquidity could fall toward peer-median levels, narrowing headroom that underpins the historical A-category profile.
Near-term Catalysts (3-12 months)
•Management disclosure of refinancing or remarketing strategy for Series 2019A/2020D/2024A (Signals 11, 13, 15).
•Final resolution or escalation of CMS-DSH dispute (Signals 14, 16).
Downside Scenario (to Immediate Attention)
•Failure to secure committed bank lines or public-market take-out before 3Q 2025, or an adverse $140 million settlement ((Oklahoma Health Care Authority 2024 06 GSAFAC 0000363157; 2025-11-14)) drawn from cash, materially eroding DSC cushion or covenant compliance.
Upside Scenario (toward Stable)
•Early refunding of ≥75 % of 2025 put exposure with long-dated fixed-rate debt, or negotiated settlement of the DSH dispute at materially less than the recorded reserve, preserving liquidity.

Appendix

[1] INTEGRIS Health and Affiliates Consolidated Financial Statements; FY-2024; note 9 (debt) & note 12 (contingencies).
[2] Offering Memorandum, INTEGRIS Baptist Medical Center, Inc. Taxable Bonds, Series 2020A; Oct 2020.
Data QA Notes: Current rating disclosed as “NR”, whereas foundation analysis cited S&P A/Moody’s A3 (2020). No updated audited DSC, liquidity or cash-flow data beyond FY-2024 excerpts; therefore coverage headroom quantified to FY-2020 baseline only. Limited visibility into size and terms of Series 2019A/2020D outstanding.
Full Signal Details: see <<<CLEANED_SIGNALS>>> entries 10–17.

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