Moody’s Investors Service last week affirmed its Baa2 rating on King’s Daughters’ Hospital and Health Services but revised the outlook to negative from stable, warning that the facility faces volume and operating pressures.

King’s is the only community health provider in the town of Madison, Ind., and enjoys a 47% market share of the primary service area in Jefferson County, analysts said. It also benefits from strong 182 days cash on hand, and a conservative balance sheet with all its $100 million of debt in a fixed-rate mode.

But its cash-flow margins have been challenged since 2010 and operating revenues have been flat or down in recent years, according to Moody’s. The hospital serves a rural area with a weak economy and faces construction risks with a new replacement hospital.

“Failure to stabilize and improve the operating cash flow margin would pressure the rating,” analyst Mark Pascaris said in a release on the revision.

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