Double Drop for Hospital

Moody’s Investors Service and Standard & Poor’s recently downgraded Elliot Hospital’s Series 2003B revenue bonds to the triple-B category due to declining liquidity and growing debt levels.

Moody’s on Tuesday downgraded the hospital to Baa1 from A3. The outlook is negative. Standard & Poor’s on Nov. 20 dropped the credit to BBB-plus from A-minus. The outlook is stable.

The New Hampshire Health and Educational Facilities Authority sold the Series 2003 debt on behalf of Elliot Hospital.

Standard & Poor’s and Moody’s rate Elliot Hospital’s upcoming $130 million of Series 2009A revenue bonds BBB-plus and Baa1, respectively. The New Hampshire Business Finance Authority is the conduit issuer for the transaction.

Bond proceeds will help finance a new 236,000-square-foot ambulatory care center and refinance prior notes, according to Moody’s.

While Elliot Hospital has a dominant business presence and growing utilization volume, the health care provider’s debt levels and liquidity are more in line with a triple-B credit, according to Standard & Poor’s.

“It is possible we could return Elliot’s rating to the A category following Elliot’s completion of its current project, especially if it meets or exceeds projected financial targets over the coming years, including strong operating margins and liquidity metrics in line with that rating category,” Standard & Poor’s analyst Jennifer Soule said in a report. “If Elliot’s financial profile were to decline significantly over the coming years, however, a lower rating is possible. At this time, we do not expect the latter scenario to occur.”

Fitch Ratings does not rate Elliot ­Hospital.

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Healthcare industry
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