Not-for-profit hospitals' Outlook stable for 2003 - Industry Scan - Brief Article

Healthcare Financial Management, Feb, 2003

Not-for-profit hospitals will maintain overall stable credit quality in 2003, marking the third straight year of relative industry stability, according to Moody's Investors Service in its upcoming annual report on the sector. However, the rating agency anticipates the outlook to face strong pressure in 2004 and beyond based on several looming negative credit factors.

During 2002, Moody's downgraded 41 ratings (representing $6.5 billion of debt) and upgraded 22 (representing $1 1.6 billion of debt). This compares favorably with 2001, when Moody's downgraded 55 ratings (representing $7.7 billion of debt) and upgraded 22 (representing only $4.3 billion of debt). Based on the number of rating changes, the ration of downgrades to upgrades improved from 2.5:1 in 2001 to 1.9:1 in 2002. Furthermore, this marks the first time since 1996 that the dollar amount of upgrades has exceeded the dollar amount of downgrades.

To read the report, go to http://www.moodys.com.