CHICAGO – SwedishAmerican Hospital in Rockford, Ill. won an upgrade from Standard & Poor's and also received a positive outlook thanks to its nearly year-old affiliation with a stronger system.
The rating agency in a report published Dec. 7 raised the rating that impacts the hospital's bonds sold in 2012 through the Illinois Finance Authority to A from A-minus and assigned the positive outlook.
"The rating action reflects our view of Swedish American Health System Corp.'s credit quality coupled with the system's full affiliation with the University of Wisconsin Hospital and Clinics Authority in early 2015," said analyst Suzie Desai.
SAH, parent SAHS, and all of SAHS' entities became part of the Wisconsin system on Jan. 1. The Wisconsin system is rated A-plus by Standard & Poor's
"The positive outlook reflects that on the UWHCA rating and the application of our group rating methodology, which could lead us to raise the SAHS long-term rating if we do the same to the UWHCA rating during the next two years," she added.
SwedishAmerican and UW Health had enjoyed a formal affiliation since 2010, leading to the development of the new SwedishAmerican Regional Cancer Center. The two decided to broaden their partnership in 2014. It allowed UW Health to extend its reach and SwedishAmerican as a community healthcare system access to capital and technology, the two said in a statement at the time.
The acquisition also has bolstered Standard & Poor's view of UW Health's credit profile as in September it raised its outlook on the A-plus rating to positive from stable.
"The positive outlook reflects our view of UWHCA's solid enterprise profile, which is anchored by its strong business position as the state's only academic medical center and the recent execution of growth strategies in alignment with University of Wisconsin School of Medicine and Public Health and University of Wisconsin Medical Foundation, " said analyst Stephen Infranco.
"We believe that because the two organizations' service areas complement each other, the merger would support an improved competitive position, economies of scale, and the ability to further strength programmatic services and better execute population health strategies," Standard & Poor's wrote.
UWHCA operates University of Wisconsin Hospital and Clinics, which consists of a 530-bed hospital and a 87-bed pediatric facility on the UW-Madison campus. It has an affiliation agreement with the University of Wisconsin School of Medicine and Public Health and so serves as its primary teaching hospital.