Standard & Poor’s has revised its outlook on Chicago-based Swedish Covenant Hospital’s BBB-plus issuer credit rating to stable from positive due to operating losses last year.

The credit is supported by adequate liquidity, improved operating performance through the interim 2009, and the maintenance of a solid market share in the competitive Chicago market. The outlook change was attributed tooperating losses that have hurt liquidity levels, weaker investment income, negative coverage of maximum annual debt service, and projected soft volume for fiscal 2009.

Analysts said the 334-bed hospital’s management team has implemented a turnaround plan that appears to be taking hold and increased payments through the Illinois provider tax program over the next five fiscal years. The program imposes a tax on hospitals based on volume levels in order to leverage additional matching federal funds.

“The stable outlook reflects management’s focus on and steps taken to achieve positive operating targets, particularly by maintaining balance sheet strength as SCH continues to invest in its facilities,” analyst Antionette Maxwell wrote. “Stronger operations in the future will secure the maintenance of the current rating; however, if challenges persist with utilization and they hurt operations or if cash declines further, an outlook or rating change may occur.”

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