S&P cuts Good Samaritan Hospital of Lebanon, Pa. revs

Fri Feb 22, 2013 12:49pm EST

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Feb 22 (Reuters) - Standard & Poor's Ratings Services on Friday said it cut the Good Samaritan Hospital of Lebanon, Pennsylvania's revenue bonds ratings, series 2004 and 2002, by three notches to B-plus from BB-plus, with a stable outlook.

"We based the downgrade on what we view as persistent high operating losses, leading to thin coverage of maximum annual debt service," said Standard & Poor's credit analyst Liz Sweeney. She added that the operating losses will soon begin to erode the hospital's unrestricted reserves "which to date have been stable because of rising investment markets and limited capital spending," Sweeney added.

Operating income briefly improved in 2011, but it reverted to losses in fiscal 2012 when the hospital had its eighth operating loss in the past 10 years, the rating agency said in a statement.

S&P said the stable outlook reflects the hospital's balance-sheet, enabling it to withstand operating losses at the current level for the next year or two.