Standard & Poor’s lowered its long-term rating on the Philadelphia Hospitals and Higher Education Facilities Authority’s revenue bonds, issued for Temple University Health System, to BBB-minus from BBB.

The downgrade “reflects our view of the continued uncertainty regarding state reimbursement, soft inpatient volumes, and an expectedly weaker, though adequate, balance sheet in fiscal 2011 as TUHS has increased plant reinvestment, funded its pension, and subsidized historical operating losses,” analyst Charlene Butterfield said in a statement.

Standard & Poor’s has a stable outlook, citing the system’s substantial improvement in operating performance, adequate debt-service coverage, and balance sheet metrics consistent with the rating.

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