CHICAGO — Fitch Ratings revised its outlook on Elmhurst Memorial Healthcare’s BBB rating to positive from stable in recognition of its post-merger growth.
The hospital has $280 million of rated debt sold through the Illinois Finance Authority; $50 million of the debt carries a letter of credit from BMO Harris Bank. The bonds are secured by a pledge of the Elmhurst obligated group's gross revenues.
“The outlook revision to positive from stable reflects Elmhurst's growing market presence and the operational benefits it's realizing from the consolidation with Edward Healthcare Services,” Fitch said in a report Oct. 9.
Elmhurst and Edward finalized their merger in July 2013. The parent organization, Edward-Elmhurst Healthcare, is the sole corporate member of both institutions and holds reserve powers.
Elmhurst's financial profile remains moderately weak for the rating category, but it is realizing the benefits of the consolidation with Edward. Most financial ratios improved over the last two years as a result of volume gains and expense saving programs.
“Fitch expects the financial profile to continue to improve over the near term. The debt for each organization remains separately obligated and Fitch does not rate Edward's debt,” analysts wrote.
Elmhurst Hospital, in Elmhurst just west of Chicago, had $447 million in total revenue in fiscal 2015. The system that includes Edward had $1.2 billion in total revenue in fiscal 2015. The system has 721 beds across three hospitals including Edward Hospital with 354, Linden Oaks Hospital with 108 and Elmhurst Memorial Hospital with 259.
