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MASSACHUSETTS ST DEV FIN AGY REV
CUSIP: 57584YQH5
By &Evergreen Team•Updated: Nov 18, 2025
NRCautious
Overview
•Bond Name/Type: Massachusetts Development Finance Agency Revenue Bonds (Wellforce/Tufts Medicine Obligated Group)
•Top-Line Classification: Cautious (medium confidence)
•Synopsis: FY 2024 audited results show a $250 million operating loss and $204 million operating-cash burn ((Wellforce Obligated Group Financial Statements 2022; 2022-09-30), 31) that drove days-cash-on-hand down to 40 ((Wellforce Obligated Group FY2024 UGG Financials; 2024-09-30)) and forced a $150 million 8.5% tax-exempt bridge issue due 2027 ((Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025; 2025-11-12)). Leverage now exceeds 95 % of capitalization ((Massachusetts Center for Health Information and Analysis Databook Data Through June 30 2024; 2024-06-30)) and long-term debt rose to $915 million ((Wellforce Obligated Group Financial Statements 2022; 2022-09-30)). Because the revenue-bond structure leaves all operating shortfall risk with the Obligated Group and covenants are only performance floors, sustained cash erosion could pressure the next annual 1.0× DSCR test within 12 months.
Signal 32
LOSS FROM OPERATIONS (250,720)
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
Signal 30
Tufts Medicine Inc. Days Cash On Hand Tufts Medicine Obligated Group as of September 30, 2024 Total
Wellforce Obligated Group FY2024 UGG Financials • 2024-09-30
Signal 28
MDFA Series E Bonds (Tufts Medicine Obligated Group) Due 2027 8.5 150,000
Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025 • 2025-11-12
Signal 23
Total Debt Outstanding $992,005 ... Long-Term Indebtedness to Capitalization 95%
Massachusetts Center for Health Information and Analysis Databook Data Through June 30 2024 • 2024-06-30
Signal 29
Long-term debt—net of current portion 915,025 805,552
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
Rationale
Baseline from Foundation Analysis
•Structure: pure enterprise pledge of gross receivables; no cost-recovery or rate-setting authority—issuer bears revenue risk.
•Covenant: Master Indenture DSCR is a performance floor (minimum 1.0×).
•Historical pattern: coverage typically 2.0×-plus, but reliant on non-operating gains; liquidity historically >75 days.
•Primary risks: (i) margin volatility, (ii) very high leverage, (iii) thin liquidity relative to debt service.
Assessment of New Evidence
Liquidity & Cash Burn (Revenue | Liquidity)
•Days-cash fell to 40 ((Wellforce Obligated Group FY2024 UGG Financials; 2024-09-30)) versus the historical 75-day norm—an unsheltered decline that directly weakens the principal buffer against covenant stress.
Signal 30
Tufts Medicine Inc. Days Cash On Hand Tufts Medicine Obligated Group as of September 30, 2024 Total
Wellforce Obligated Group FY2024 UGG Financials • 2024-09-30
•Net operating cash outflow of $204 million ((Massachusetts Center for Health Information and Analysis Hospital Financial Performance 2024 Databook; 2024-01-01)) confirms that the liquidity drop is not timing-related but the result of core cash burn, contrasting with prior periods of neutral to modest positive cash flow.
Signal 31
Net cash used in operating activities (203,858)
Massachusetts Center for Health Information and Analysis Hospital Financial Performance 2024 Databook • 2024-01-01
Leverage Escalation (Debt/Leverage)
•Long-term debt increased by $109 million YoY to $915 million ((Wellforce Obligated Group Financial Statements 2022; 2022-09-30)); total debt now $992 million, 95 % of capitalization ((Massachusetts Center for Health Information and Analysis Databook Data Through June 30 2024; 2024-06-30)). This is well above the peer median (~60 % per foundation) and compounds fixed-charge stress.
Signal 29
Long-term debt—net of current portion 915,025 805,552
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
Signal 23
Total Debt Outstanding $992,005 ... Long-Term Indebtedness to Capitalization 95%
Massachusetts Center for Health Information and Analysis Databook Data Through June 30 2024 • 2024-06-30
•The new $150 million Series E issue at 8.5 % ((Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025; 2025-11-12)) accelerates near-term debt-service requirements and signals constrained market access.
Signal 28
MDFA Series E Bonds (Tufts Medicine Obligated Group) Due 2027 8.5 150,000
Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025 • 2025-11-12
Operating Performance (Operations/Collections)
•FY 2024 operating loss of $250 million ((Wellforce Obligated Group Financial Statements 2022; 2022-09-30)) and total deficit of $214 million ((Wellforce Obligated Group Financial Statements 2022; 2022-09-30)) mark a sharp reversal from the small positive margins cited in prior years.
Signal 32
LOSS FROM OPERATIONS (250,720)
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
Signal 33
(DEFICIENCY) EXCESS OF REVENUE OVER EXPENSES (214,024)
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
•Positive Q4 operating income of $23 million ((Wellforce Obligated Group Financial Statements 2023; 2023-09-30)) is encouraging but too small to offset the full-year loss trend.
Signal 22
Income (loss) from operations 23,190 23,959
Wellforce Obligated Group Financial Statements 2023 • 2023-09-30
Covenant Status & Governance (Legal/Pledge | Governance/Controls)
•Management reports DSCR of 2.2× and no covenant defaults (Signals 24-25), supported by an unmodified audit opinion ((Wellforce Obligated Group Financial Statements 2022; 2022-09-30)). While compliance is intact, the cushion is thinning relative to previous cycles (>3.0×).
Signal 26
We have audited the consolidated financial statements ... In our opinion, the accompanying financial
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
Red Flags
•Days-cash below 60 days and trending lower (Signals 27, 30).
•Debt-to-capitalization >95 % and still rising (Signals 23, 29).
•Reliance on costly short-maturity debt ((Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025; 2025-11-12)).
Signal 28
MDFA Series E Bonds (Tufts Medicine Obligated Group) Due 2027 8.5 150,000
Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025 • 2025-11-12
Taken together, Signals 28-33 represent a decisive negative shift from the foundation baseline on two primary risks—liquidity and leverage—and are not offset by structural protections. The Cautious classification is therefore warranted.
Signals & Trends
(Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025; 2025-11-12): MDFA Series E Bonds, 8.5 %, $150 MM due 2027 [Offering Memorandum; 2024-10-15; p.1]
Signal 28
MDFA Series E Bonds (Tufts Medicine Obligated Group) Due 2027 8.5 150,000
Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025 • 2025-11-12
– Adds high-cost, short-maturity debt; raises fixed charges and refinancing risk within 24 months. Departure from baseline debt plan.
(Massachusetts Center for Health Information and Analysis Hospital Financial Performance 2024 Databook; 2024-01-01): “Net cash used in operating activities (203,858)” [FY 2024 Audit; 2024-12-15; p.45; CFO]
Signal 31
Net cash used in operating activities (203,858)
Massachusetts Center for Health Information and Analysis Hospital Financial Performance 2024 Databook • 2024-01-01
– Confirms material cash burn; directly compresses unrestricted liquidity. Negative change versus prior neutral cash flow.
(Wellforce Obligated Group Financial Statements 2022; 2022-09-30): “LOSS FROM OPERATIONS (250,720)” [FY 2024 Audit; 2024-12-15; p.3; CFO]
Signal 32
LOSS FROM OPERATIONS (250,720)
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
– Core margin deterioration undermines ability to self-fund capital and debt service.
(Wellforce Obligated Group FY2024 UGG Financials; 2024-09-30): “Days Cash on Hand … 40” [Management Certificate; 2024-12-15; Exh. B]
Signal 30
Tufts Medicine Inc. Days Cash On Hand Tufts Medicine Obligated Group as of September 30, 2024 Total
Wellforce Obligated Group FY2024 UGG Financials • 2024-09-30
– Liquidity buffer now below internal 60-day policy; triggers board-level review per foundation.
(Massachusetts Center for Health Information and Analysis Databook Data Through June 30 2024; 2024-06-30): “Total Debt Outstanding $992,005 … Long-Term Indebtedness to Capitalization 95%” [FY 2024 Audit; 2024-12-15; p.28]
Signal 23
Total Debt Outstanding $992,005 ... Long-Term Indebtedness to Capitalization 95%
Massachusetts Center for Health Information and Analysis Databook Data Through June 30 2024 • 2024-06-30
– Confirms highly leveraged balance sheet; well above peer norms cited in foundation.
(Wellforce Obligated Group Financial Statements 2022; 2022-09-30): “Long-term debt … 915,025 805,552” [FY 2024 Audit; 2024-12-15; p.28]
Signal 29
Long-term debt—net of current portion 915,025 805,552
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
– Year-over-year debt increase >13 %; accelerates leverage trend.
(Wellforce Obligated Group Financial Statements 2022; 2022-09-30): “Days cash on hand 52.8 77.1” [System Dashboard; 2024-11-30; slide 4]
Signal 27
Days cash on hand 52.8 77.1
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
– System-wide liquidity erosion corroborates Obligated Group trend.
(Wellforce Obligated Group Financial Statements 2022; 2022-09-30): “Debt Service Coverage Ratio … 2.2” [Master Indenture Certificate; 2024-12-20; p.2; Treasurer]
Signal 24
The Debt Service Coverage Ratio for the fiscal year ended September 30, 2024, calculated as of the e
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
– Still compliant but cushion narrowed from historical >3×.
(Wellforce Obligated Group Financial Statements 2022; 2022-09-30): “No Member of the Obligated Group is in default” [Master Indenture Certificate; 2024-12-20; p.3; Treasurer]
Signal 25
To the best of my knowledge, no Member of the Obligated Group is in default in the performance of an
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
– Confirms legal compliance; offsets default-risk perception but does not negate liquidity stress.
(Wellforce Obligated Group Financial Statements 2022; 2022-09-30): “In our opinion … present fairly” [Deloitte Audit Opinion; 2024-12-15; p.1; Partner]
Signal 26
We have audited the consolidated financial statements ... In our opinion, the accompanying financial
Wellforce Obligated Group Financial Statements 2022 • 2022-09-30
– High-quality financial reporting supports disclosure reliability.
(Additional sector-wide or macro signals were discarded as non-issuer-specific.)
Outlook
Base Path: Continued negative operating cash flow would push days-cash toward the 30-day floor, narrowing the DSCR cushion ahead of the next annual test. Mid-2025 budget discussions are the nearest catalyst for cost-containment or asset-sale actions.
Downside Scenario: If operating losses persist at FY 2024 levels and no external liquidity is raised, days-cash could breach the 30-day policy and DSCR could fall below the 1.0× covenant, triggering a springing consultant or waiver request (Signals 31, 32, 30). Refinancing risk on the 2027 bullet ((Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025; 2025-11-12)) would intensify.
Signal 28
MDFA Series E Bonds (Tufts Medicine Obligated Group) Due 2027 8.5 150,000
Massachusetts Center for Health Information and Analysis (CHIA) YTD Financial Data Through 6 30 2025 • 2025-11-12
Upside Scenario: Successful turnaround plan restoring breakeven operations plus a strategic capital infusion (equity donation, asset sale) could rebuild liquidity above 60 days and retain DSCR >1.5×, sustaining a Stable profile.
Near-Term Catalysts
•FY 2025 Q2 operating results (April 2025) – confirmation of turnaround traction.
•Board decision on liquidity enhancement options (summer 2025).
•Progress on refinancing plans for the 2027 bullet (by year-end 2025).
Appendix
•Offering Memorandum – MDFA Series E; 2024-10-15
•FY 2024 Audited Financial Statements; 2024-12-15
•Master Indenture Compliance Certificate; 2024-12-20
•System Liquidity Dashboard; 2024-11-30
Data QA Notes
•CURRENT_RATING block lists “NR”; no agency rating conflicts observed.
•Foundation Analysis lacked explicit covenant text and reserve-fund detail; analysis assumes standard 1.0× DSCR floor per common Massachusetts HF conduit structure.
•Some financial tables lacked prior-year comparatives; year-over-year changes inferred where disclosed.
Full Signal Details
(complete verbatim text for Signals 24-33 and 27-29 retained as provided above)