NEW YORK - Standard & Poor's Ratings Services said it has revised its outlook to negative from stable and affirmed its A-plus rating on bonds issued by South Carolina Jobs Economic Development Authority for AnMed Health (AnMed). At the same time, Standard & Poor's affirmed the AAA/A-1 rating on the series 2009A, 2009C, and 2009D variable-rate demand bonds also issued by the authority for AnMed.
"We based the outlook revision on our assessment of AnMed's lower-than-expected 2011 operating performance, erratic earnings over the past several years, increasing bad debt and charity care, and volume softness in the interim period, though operating performance has improved through the first five months of fiscal 2012 ended Feb. 29," said Standard & Poor's credit analyst Meggi McNamara. "AnMed has limited room at the A-plus rating level to continue to post operating margins at the current level," said McNamara.
Standard & Poor's said it did not lower the rating at this time because the ratings agency believes AnMed's unrestricted cash and investment balances provide some time to address recent earnings issues. However, continued weak and erratic operating earnings are not compatible with an A-plus rating and over the near to medium term, AnMed must meet budgeted expectations and stabilize volume, while also maintaining cash and investments at current levels.