NEW YORK - Moody's Investors Service said it has downgraded to A2 from A1 the ratings assigned to Northwest Community Hospital's (NCH) bonds issued through the Illinois Finance Authority.

The rating outlook is stable at the lower rating level. The rating action affects $230.2 million of debt.

The downgrade to A2 follows unfavorable financial performance in FY 2011, which, while better than FY 2010, fell notably short of the 2011 budget.

The downgrade also reflects NCH's multi-year departure from its historic financial profile that had included exceptional margins and ample cash resources relative to debt.

The A2 rating is well supported by solid demand of over 24,000 admissions annually, still healthy absolute liquidity and solid socio-economics of the service area. The stable rating outlook reflects our belief that NCH will improve operations in FY 2012 given management's proactive strategies to address revenue and institute financial rigor to the operations.

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