Standard & Poor's Ratings Services said it lowered its long-term rating to BBB-minus from BBB on the Wisconsin Health and Educational Facilities Authority's series 2006 revenue bonds issued for Divine Savior Healthcare Inc.
The outlook is stable.
"The rating action reflects our view of DSH's weaker balance sheet metrics as it begins its $25 million capital improvement plan," said Standard & Poor's credit analyst Santo Barretta. "DSH is funding the project with a combination of debt, operations, and unrestricted reserves, diluting reserves to levels that no longer commensurate with a BBB rating."
The plan consists of an expansion to the hospital's surgery rooms, a new medical office building (MOB), a new wellness center, and renovations to an existing MOB. Management anticipates completing the bulk of construction in 2015 and 2016, with the MOB renovations starting in 2017 and taking a few years to complete.
