Standard & Poor’s last week revised its rating outlook to negative from stable on the Walker, Dade, and Catoosa Counties Hospital Authority.
The action affects $23.1 million of debt issued for Hutcheson Medical Center. The credit agency affirmed its BB-plus underlying rating on the bonds.
The outlook change stems from the authority’s plan to issue $12.7 million of bonds this year to refund outstanding Series 1997A and 2003 debt. Proceeds will also be used to provide new money for hospital facility renovations, equipment purchases, and information-technology upgrades, according to the rating report.
Standard & Poor’s analyst Karl Propst noted in the report that the negative outlook also reflects the hospital’s weak cash position.
“Overall, we believe that management is successfully implementing its turnaround plan as evidenced by positive net excess for fiscal 2007 and budgeted for 2008,” Propst wrote. “We remain concerned about the weak liquidity, but we expect that Hutcheson will continue on its positive trajectory, and that pending projects will help to rebuild the medical center’s cash and investment balances.”
