Standard & Poor’s revised its outlook to positive from stable on Meriter Hospital’s A rating in recognition of its growing volume figures and overall stronger financial profile.
The hospital’s $89 million of outstanding debt was sold in 2006 through the Wisconsin Health and Educational Facilities Authority.
“We expect that Meriter Health Services will sustain the improved levels of financial performance to support its capital investments and to maintain its market position in the competitive Madison area,” said Standard & Poor’s credit analyst Suzie Desai. “If the system demonstrates another year or two of strong performance and maintenance of stable liquidity levels, we could upgrade its debt rating to A-plus.”
The credit reflects a maximum annual debt service coverage level of 4.4 times through fiscal 2006 and five times for the first nine months of fiscal 2007, an 82% increase in absolute liquidity levels over the past five years, growing volume trends, and a steady market position in a relatively competitive environment with good demographics. Negative factors include low operational liquidity for the rating level and continued higher-than-routine capital expenditures for the next year or two.
