Standard & Poor's Ratings Services said it revised its outlook to negative from stable and affirmed its A-minus long-term rating on the Illinois Finance Authority's series 1998 fixed-rate revenue bonds and its A-minus underlying rating (SPUR) on the authority's series 2002 variable-rate demand bonds, both issued for Centegra Health System (CHS).

Standard & Poor's also assigned its A-minus long-term rating to the authority's series 2012 fixed-rate bonds issued for CHS. The outlook is negative.

"The outlook revision reflects our view of the high likelihood that additional new money debt will be issued during the next one to two years because of CHS' new hospital project in Huntley and the pressure that the new money debt could cause to both the balance sheet and maximum annual debt service coverage," said Standard & Poor's credit analyst Suzie Desai.

The near-term series 2012 bond issuance is mostly a refinancing transaction (with some net new money). The rating agency anticipates that the 2012 refinancing transaction will further improve unrestricted liquidity levels given the lower debt service payments through 2020 and likely provide some additional flexibility while CHS completes construction of the new Huntley campus in the summer of 2016.


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