DALLAS - Texas' Decatur County Hospital Authority could see its BB-plus credit rating return to investment grade after Standard & Poor's placed a positive outlook on the health care provider for Wise County.
"The positive outlook reflects our view of improved operations and maximum annual debt service coverage through the year-to-date period ended June 30," analyst Robert Dobbins noted in the Sept. 15 report. "Furthermore, debt metrics have moderated modestly since we assigned the rating in 2014."
The authority does business as the Wise Regional Health System with 160 licensed beds and three campuses in Decatur, Texas, about 60 miles northwest of Dallas-Fort Worth.
"We assess the hospital's financial profile as adequate as a result of strong operations but very low unrestricted reserves and very high leverage," analysts wrote. "Also contributing to the revised outlook is Wise's below average financial transparence as consolidated financial information are only prepared on a summary level and exclude cash-flow statements. Combined, we think these credit factors lead to an indicative rating level of BBB-minus."
Wise Regional's service area in Wise County had a 2014 population of about 61,787. The population is projected to grow by 6% during the next five years and has average employment and per capita personal income indicators, according to S&P.
"We believe that the board and leadership team have aided the hospital's growth and operational turnaround during the past several years, as evidenced by the increase in the hospital's balance sheet and cash flow," analysts said.
