Standard & Poor's Ratings Services said it raised its long-term rating on Saratoga County Industrial Development Agency, N.Y.'s series 2007B, 2004, and 2003B bonds, issued for Saratoga Hospital, and its underlying rating on the agency's series 2007A bonds, issued for the hospital, one notch to A-minus from BBB-plus.
The outlook is stable.
The upgrade reflects Standard & Poor's assessment of Saratoga Hospital's improved balance sheet over the past few years, so much so that it now reflects an A-minus rated credit, and the hospital's history of generating, what Standard & Poor's considers, solid and consistent operating income, generating good coverage and growing outpatient volume.
At the same time, Standard & Poor's affirmed its AAA/A-1-plus rating on the agency's series 2007A bonds.
The stable outlook reflects Standard & Poor's opinion that the hospital will likely continue to post strong operating results based on historical trends and that any volume softness on the inpatient side will likely remain offset by growth on the outpatient side. The outlook also reflects Standard & Poor's opinion that liquidity will likely continue to improve due to the hospital's strong cash flow.
"A negative rating action would be based on operational performance deterioration such that debt service coverage would decrease to less than 3x or if days' cash on hand were to decrease to 140 days' or less," said Standard & Poor's credit analyst Margaret McNamara. "Additional factors that could cause us to lower the rating would be the issuance of additional debt beyond $20 million without commensurate liquidity growth."
