Moody's Investors Service has lowered its rating to Baa3 from Baa2 on Anderson Hospital due to its weakened financial performance. The action affects $33.9 million of rated debt sold through the Southwestern Illinois Development Authority.

The Maryville hospital's financial performance suffered through the first 10 months of fiscal 2011, with volume trends declining and an unexpected increase in debt — through a private placement — without a boost in cash flow to support it. Additional issuance is expected in fiscal 2012.

"The outlook is revised to stable from negative at the lower rating level, as Anderson maintains its leading market share in the primary service area, has a debt profile that is all fixed-rate debt, and provides employees a defined contribution pension plan instead of a defined benefit plan," Moody's analysts wrote.

Anderson is a 151-bed hospital with 7,838 admissions and operating revenue of $133 million in fiscal 2010. It holds a leading market share of 43%.

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