Moody's Investors Service last week revised its outlook to positive from stable on Riverside Health System's A3 bond rating, an action that affects $125 million of outstanding debt issued through the Illinois Finance Authority.
The outlook change reflects "elevated cash flow generation, improved liquidity position, and continued market share capture," analysts wrote. The system's strengths include its leading and growing market presence in the two-hospital market of Kankakee County far south of Chicago and good market presence in Will County.
Riverside saw significant growth in patient admissions and surgeries in fiscal 2006 and the start of fiscal 2007, leading to a rebound of its past operating losses in fiscal 2005. The system's challenges include its reliance on one large managed care payor, small operating revenues, and a small admissions base for its rating category. Riverside's future capital spending plans are focused on developing outpatient centers in fast-growing Will County, and the system does not have plans to issue new debt in the coming years.
