Factors affecting credit rating downgrades of hospital revenue bonds.
This paper identifies the key institutional, operational, financial, and market-area factors associated with downgrades in the credit ratings of hospitals' outstanding, tax-exempt revenue bonds between 1985 and 1988. We examined data from 41 hospitals whose ratings had been downgraded from A to BBB by Standard and Poor's Corp., as well as data from 17 hospitals whose ratings had been downgraded from BBB to BB and lower, compared with hospitals having unchanged A and BBB ratings, respectively. The analysis found only two variables--the hospital's occupancy rate and its ratio of cash and cash equivalents to debt service payments--that were significantly associated with both types of downgrades.
McCue
M J
MJ
Williamson Institute for Health Studies, Department of Health Administration, School of Allied Health, Virginia Commonwealth University, Richmond 23298-0203.
Renn
S C
SC
Pillari
G D
GD
D001509:Bed Occupancy; D002202:Capital Financing / Q000706:statistics & numerical data*; D005377:Financial Management, Hospital / Q000706:statistics & numerical data*; D007449:Investments / Q000145:classification*; D015999:Multivariate Analysis; D012044:Regression Analysis; D014481:United States