CHICAGO -- Standard & Poor's has revised Illinois-based Carle Foundation's outlook to positive in recognition of its strong financial performance and improved balance sheet.

The rating agency affirmed the healthcare borrower's issuer credit rating of A-plus Jan. 5. The outlook had been stable.

The foundation issues its debt through the Illinois Finance Authority. The foundation's floating rate debt carries top ratings based on support from both the foundation and letters of credit from Northern Trust Corp. and JPMorgan Chase Bank.

"The outlook revision reflects a sharp improvement in financial metrics as the final payment on the promissory note that Carle FD entered into when it acquired the Carle Clinic in 2010 was made," said Standard & Poor's analyst Martin Arrick. Paying off the note has lowered the system's debt service by nearly half.

The rating reflects the foundation's long record of improving market share in its core Champaign-Urbana hub, and a very strong balance sheet, combined with a second strong year of financial performance through nine months ended Sept. 30, 2014.

The rating also factors in an integrated business model with a large multi-special group practice incorporated into the obligated group that analysts said positions Carle FD very well for health care reform as the leading health care system in its broad 29-county service area.

Carle is reviewing its long-term capital plan and some additional debt is possible.

"While we believe Carle FD has debt capacity at the current level of financial performance, a higher rating is currently precluded pending receipt and analysis of the capital plan," analysts said.

The credit also benefits from the completion in 2013 of a larger tower project that has contributed to the system's long term growth. State regulators also approved an additional 48 beds which came online late last year.

Carle Foundation is a physician-led integrated health system that includes the 360-staffed-bed Carle Foundation Hospital, the Carle Physician Group, and the Health Alliance Medical Plan.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.