NEW YORK - Standard & Poor's Ratings Services said it revised the rating outlook to negative from stable on Louisiana Public Facilities Authority's $105 million of outstanding bonds issued for Touro Infirmary (Touro). The outlook revision reflects concern about Touro's ongoing consolidated operating losses, which are affecting Touro's ability to improve its liquidity and fund needed capital expenditures.
However, Standard & Poor's said it affirmed its BBB+ rating, reflecting the hospital's increasing patient utilization trend, an adequate liquidity level for the rating despite an absolute decline in unrestricted cash and investments in recent years, and strong debt service coverage. The preceding credit strengths are diminished by consolidated operating losses that also are depressing Touro's bottom line margins.
"The revision of Touro's rating outlook to negative reflects our concern that Touro may not be profitable from operations in the current year as anticipated approximately two years ago," said Standard & Poor's credit analyst Kenneth Rodgers. "If Touro is unprofitable in fiscal 2004 and liquidity declines further, the rating could be lowered."
