Bangkok--18 Jun--Standard & Poor's
Standard & Poor's Ratings Services revised the outlook to stable from negative and affirmed its 'A+' long-term rating and underlying rating (SPUR) on bonds issued by various authorities, including the Little Rock Health Facilities Board, Ark., and the City of North Little Rock Health Facilities Board, Ark., for Baptist Health, Ark. At the same time, Standard & Poor's affirmed its 'A' long-term ratings on obligations issued for Baptist Health by Heber Springs, Ark., Hospital & Health Facilities Board and Clark County Hospital & Health Care Facilities Board, Ark. The lower-rated obligations are secured by a narrower revenue stream than the bonds rated 'A+'.
"The return to a stable outlook reflects the system's improved financial performance and debt service coverage capacity in fiscal 2009 and through the first three months of fiscal 2010 ended March 31," said Standard & Poor's credit analyst Karl Propst.
Following a sizable operating loss in fiscal 2008 that was exacerbated by a one-time $15 million accounts receivable write-down, Baptist Health implemented several revenue cycle and cost-savings initiatives. The initiatives, supported by relatively stable volumes, helped to shore up the hospital system's performance. In addition, the organization continues to hold a solid market position as the largest health system in Arkansas, and has maintained its balance sheet strength (which provided a cushion against operating volatility in fiscal 2008). A provider tax, adopted in Arkansas in 2009, will be effective for a full year in 2010 and will also provide the system with an additional operating cushion.
Baptist Health operates five acute-care hospitals (with more than 900 staffed beds) including two critical-access hospitals and one 49-bed facility in Stuttgart, Ark., which became a leased facility in January 2009. Additionally, the system operates a rehabilitation hospital, a retirement community, a skilled-nursing facility, and a 37-bed long-term acute-care hospital that is located within the main Little Rock Medical Center. Baptist Health also has joint ownership with Blue Cross and Blue Shield of Arkansas in Health Advantage, an HMO.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Not-For-Profit Health Care, June 14, 2007
USPF Criteria: Debt Derivative Profile Scores, March 27, 2006
Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Karl Propst, Dallas (1) 214-871-1427
Stephen Infranco, New York (1) 212-438-2025
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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Americas Customer Service: (1) 212-438-7280
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