LOS ANGELES — Revenue bonds issued for Renown Regional Medical Center by Reno, Nev. and Washoe County received a one-notch upgrade to A from A-minus March 11 based on an improved financial profile and changes Standard & Poor's made to the way it rates stand-alone hospitals.

The outlook on the bonds is stable.

The upgrade of Renown is based on the application of Standard & Poor's "U.S. Not-For-Profit Acute-Care Stand-Alone Hospitals" criteria, published on Dec. 15.

S&P also affirmed an AAA/A-1-plus rating on Renown's series 2009A and B variable-rate demand bonds and an AAA/A-1 rating on RRMC's series 2008A and B VRDBs, based on the application of the joint criteria assuming low correlation.

The long-term component of the ratings is based jointly on Renown's underlying rating and the long-term rating of the letter of credit bank, while the short-term ratings are based solely on analysts rating on the bank. The LOC on series 2008 bonds with Union Bank of California expires in January 2019, while the LOC on series 2009 bonds with Wells Fargo Bank expires in August 2016.

"We assessed Renown's enterprise profile as very strong," said Standard & Poor's credit analyst Cynthia Keller, "characterized by its leading market share and benefits from its integrated delivery system, which includes acute and non-acute capacity, outpatient services, employed physicians, and an insurance company."

Renown's service area economy, while currently improving, has shown volatility in the past due to reliance on gambling and tourism, but the significant improvement in earnings and cash flow experienced by the hospital are expected to continue, Keller said.

The stable outlook reflects S&P's assessment that Renown has a strong enterprise profile that is well-positioned for future care delivery and reimbursement model changes, Keller said.

Until Renown's debt levels moderate so that debt service coverage and debt ratios are more in line with rating level medians, an additional upgrade is unlikely, according to the report.

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