Hospital Gets Negative News

Park Nicollet Health Services saw the outlook on its A credit revised last week to negative from stable by Standard & Poor’s to reflect soft patient numbers and concerns over its financial performance of late.

“The outlook revision reflects the recent soft patient utilization growth and concern about year-to-date financial performance and debt service coverage, which could result in a lower rating if these trends continue,” analyst Kenneth Rodgers warned.

The action affects $142 million of debt sold in 2007 and $259 million sold in 2003. The hospital uses St. Louis Park to sell its debt. Park Nicollet is restructuring much of its debt in an upcoming sale — about $363 million. About $220 million is fixed rate and another $143 million is variable rate and will carry a letter of credit from Wells Fargo Bank NA. The sale is expected to take place in mid-August.

The provider operates the flagship 426-bed Park Nicollet Methodist Hospital and the 557-physician Park Nicollet Clinic system.

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Healthcare industry
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