Standard & Poor's Ratings Services revised to stable from negative its outlook on the Colorado Health Facilities Authority's revenue bonds, issued on behalf of Vail Valley Medical Center (VVMC), and affirmed its 'BBB+' rating on the bonds. The outlook change reflects strong financial results and solid debt service coverage through the first nine months of 2009. VVMC continues to benefit from a very strong business position.
          "The rating reflects VVMC's business position in and around the internationally known resort of Vail, Colo.; dramatic financial turnaround during interim 2009 driven by productivity and other operating initiatives, culminating in an operating margin of 9.8%; and strong cash flow growth and maximum annual debt service coverage, which increased to 6.7x through interim 2009," said Standard & Poor's credit analyst Brian Williamson.
          The stable outlook reflects solid financial results and debt service coverage through interim 2009 following a weak fiscal 2008. Management efforts and implementation of consultant recommendations translated into a return to profitability and improved balance sheet metrics. Conversely, should operating performance deteriorate, liquidity weaken, or unexpectedly large capital plans emerge, we could revise the outlook to negative or lower the rating.

          RELATED RESEARCH
          USPF Criteria: "Not-For-Profit Health Care," June 14, 2007

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