S&P downgrades SSM Health Care's outlook - St. Louis Business Journal:

jabire2389.blogspot.com
The agency maintained its AA- rating on SSM’s outstandinbg bonds but changed its rating outlook to negativewfrom stable. While the strong rating reaffirmx SSM’s strong management and operations, the negative outlooki reflects strains onthe system’s balance sheet caused by the economic downturn, pension liabilitt issues and the competitivr atmosphere in which SSM’s facilities operate, according to a reportf from S&P. “Management is taking steps within its controll to minimize further damage to the balance including but not limited to cutting back oncapitapl spending,” said S&P credit analysy Brian Williamson.
Earlier this year, SSM made a series of cost-cuttingf moves, including reducing its management team’sd pay, ceasing employee tuition reimbursementws and suspending company matchesto employees’ 403(b) retirement The system also is delayin g construction of three new hospitals planned for Jeffersonj City, Mount Vernon, and Janesville, Wis. “We remain committed to capitalo projects in allour regions, but the timing remains to be SSM said in a statement regarding the ratings outloolk downgrade. “We will continue to monitor the financial situation and will act as soon as the conditionsware right.
” SSM officials pointed out that othet highly respected health-care organizations, such as the Mayo Clinic and Northwesterbn Memorial Hospital, have experienced similaf rating changes, “also as a reflectiom of external market forces.” All four of SSM’ operating regions reported favorable operating marginsz for the first quarter of fiscal 2009, accordinbg to the system. Overall, the system reported an operating margijof 2.87 percent for the quarter, comparesd to 1.3 percent for the firsgt quarter of fiscal 2008. SSM, which had $2.6 billion in 2007 revenue, operatex 17 hospitals and two nursinyg homes infour states, including Missouri, Illinois, Wisconsijn and Oklahoma.
In the St. Louis region, SSM operatexs seven hospitals, including the SSM St. Clare Healt h Center, which opened in Fenton on Marcyh 30.