UC Med Center Recovering

Standard & Poor’s last week revised its outlook to stable from negative on the University of Chicago Medical Center’s AA-minus rating due to its strong operating performance over the last year.

The review came ahead of the hospitalr’s conversion of $166 million of variable-rate bonds to fixed rate through the Illinois Finance Authority.

“The rating reflects UCMC’s solid operations after implementation of an expense-reduction program, good maximum annual debt-service coverage, successful strategy of attracting the appropriate acuity patients while working with other local hospitals to transfer patients that are better suited to those facilities, and strong health system management,” said analyst Brian Williamson.

The system is rated AA-minus by Fitch Ratings and Aa3 by Moody’s Investors Service.

The hospital is shifting more of its debt to a fixed rate. It plans to have a mix of 50% fixed-rate debt and 50% floating rate once it completes issuing $500 million for its new pavilion. UCMC will issue another $150 million toward the project in the fall and the final $125 million in the fall of 2011.

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