Standard & Poor’s has revised its outlook on Rush University Medical Center Obligated Group’s underlying A-minus rating to positive in recognition of its operating performance and a reduction in construction risks as it nears completion on a new patient tower.
The rating action affects $411.6 million of 2009 bonds issued through the Illinois Finance Authority, $50 million of 2008 bonds and $97 million of 2006 bonds. Rush also has top-rated outstanding variable-rate bonds rated based on joint support from Rush and a letter of credit from Northern Trust Co.
“The positive outlook reflects near completion of Rush University Medical Center’s new patient tower and Rush’s robust operating performance, which has helped to maintain a fairly stable balance sheet despite RUMC’s recent period of major construction,” Standard & Poor’s analyst Suzie Desai said.
The new tower is scheduled to open early next year. The rating is supported by Rush’s strength as an academic medical center with a well-defined market recognition and broad clinical services with net patient revenues of $1.5 billion and debt service coverage of 4.2 times.
Credit risks include managing the final costs for the new patient tower, a slowing of volume growth, exposure to state Medicaid pressures, and its close location to three other hospitals.
