Standard & Poor's has raised Rush University Medical Center Obligated Group's rating by one notch to A in recognition of the system's completion of a new patient tower on Chicago's near west side and good operating performance.
The rating was upgraded on $50 million of debt sold through the Illinois Finance Authority in 2008, $412 million of bonds issued in 2009, and $97 million in 2006. Rush has a total of $657 million of debt.
"RUMC, the obligated group's large flagship hospital, has also improved its market share and volumes despite location in the competitive Chicagoland area," the agency wrote. The new tower opened early last year and includes 376 private rooms, a new emergency room, and a new surgical, interventional, and diagnostic area.
The hospital saw good operating performance in fiscal 2012 and fiscal 2013 to date "despite the fixed costs and depreciation associated with the new patient tower. A 3% margin is expected this year.
Unrestricted liquidity is adequate and improving and additional balance sheet improvements are anticipated as capital spending decreases in the coming years. The credit benefits from the hospital's strong market recognition as an academic medical center with broad clinical services, extensive education and research capabilities, and a solid market position in several key service lines. The system generated $1.5 billion in patient revenues.
The system's challenges include its location in a competitive market and a revenue base that includes 13% from Medicaid. The obligated group includes RUMC in Chicago and two other suburban acute care hospitals.
