Only weeks after downgrading the credit, Moody’s Investors Service this week revised its outlook on William Beaumont Hospital to negative from stable as it prepares to issue $169 million of revenue bonds.

The revision stems in part from concerns over the facility’s financial profile and the weak economy in southeast Michigan, according to analysts.

At the same time Moody’s affirmed its A1 rating — downgraded from Aa3 in September — but warned that the current rating is based on an assumed fixed-rate transaction.

“Should the structure of the bonds take a form other than long-term fixed-rate bonds, such as a long-dated term mode structure, the rating and the outlook will be immediately revisited,” analysts wrote.

Beaumont plans to use proceeds from the $169 million issue to refinance $60 million, reimburse itself for $90 million of prior capital expenditures, and fund a debt service reserve fund.

Located in Royal Oak, Mich., Beaumont enjoys a leading market share and strong clinical reputation in the area. Its “well-tenured and seasoned” management team has worked to stem the system’s recent fiscal declines, Moody’s analysts said.

Challenges include ongoing operating losses and a sharp decline in liquidity, which dropped 25% between June 30 and Sept. 30, though $90 million of the bond proceeds will be used to restore some of its liquidity.

In light of its fiscal pressures, Beaumont has scaled back planned capital expenditures in 2008 to $225 million from $350 million, according to Moody’s. It’s unclear whether the planned issuance is part of a $583 million borrowing that the hospital has postponed since early September.

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