Standard & Poor’s lowered its rating to BB-minus from BB on the Rhode Island Health and Educational Building Corp.’s remaining $13 million of Series 1998 revenue bonds issued for Roger Williams Hospital.

The facility was renamed Roger Williams Medical Center in January.

The outlook is negative based on the organization’s decreasing revenue and volumes through the fiscal 2010 interim period  — the nine months ended June 30, 2010 — uncertain economic factors, and the organization’s thin and declining liquidity.

Roger Williams’ financial operating performance improved gradually from fiscal 2006 to fiscal 2009, excluding one-time expenses.

However, management indicates fiscal 2010 year-end results, while expected to be break even, will vary negatively from fiscal 2009.

While management is focused on reducing costs through efficiencies, the organization’s declining revenues and volumes are a negative credit consideration, Standard & Poor’s said.

The rating agency believes these factors are magnified by uncertain economic issues, including imminent Medicaid cuts, which are currently unknown, and general recessionary pressures that have likely contributed to the declining volume.

In addition, the hospital’ liquidity continues to be thin for the rating, with a balance of $13 million in unrestricted cash, or just 27 days’ coverage of annual operating expenses available to support the organization, Standard & Poor’s said.

Offsetting credit factors include Roger Williams’ light debt level, with a moderate cash-to-debt ratio of 56% through the interim period of fiscal 2010, though down from 71% at the close of fiscal 2009, and a low debt burden ratio of 1.9%, the agency said.

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