Standard & Poor’s upgraded the long-term rating on $7.9 million of outstanding bonds sold for the Huron Regional Medical Center Inc. to A-minus from BBB-plus. The bonds were issued through the South Dakota Health and Educational Facilities Authority. The outlook is stable.
Located in Huron, the medical center enjoys above-average cash on hand and low debt levels, said Standard & Poor’s analyst Keith I. Dickinson in a release accompanying the report.
“Although it is unusual to have a critical-care-access hospital included in the A category, Huron’s consistent operating performance, sizable investment income, and overwhelmingly strong balance sheet support the A- rating,” Dickinson said.
The hospital reported an operating income of $1.3 million, or a 4.1% operating margin, in fiscal 2007, as well as an additional $3.5 million in excess income, much of it stemming from strong investments. Debt service coverage was “excellent” at 6.4 times through the first seven months of fiscal 2007, Dickinson noted. Huron has 551 days of cash on hand and a cash-to-debt ratio of 488.1%.
The hospital currently has no future plans to take on additional debt.
A pledge of gross revenues of Huron Regional Medical Center, the sole member of the obligated group, and a mortgage on the facilities secure the bonds.