The largest hospitals in Grand Rapids, Mich., can expect to be rewarded for their recent merger with easier financing terms.
Standard & Poor's this month affirmed its A+ ratings for both Blodgett Memorial Medical Center and Butterworth Health System and revised its outlook for both to positive from stable.
The New York-based credit-rating agency said the positive outlooks reflect the hospitals' September 1997 merger. The new organization, Spectrum Health, will have "enormous market clout" with market share of more than 70%, it said.
The hospitals merged last September after beating back an antitrust lawsuit filed by the Federal Trade Commission.
As of June 30, 1997, the hospitals had combined revenues of more than $700 million and net income of more than $59 million, for a profit margin of 8.4%, the rating agency said.
The hospitals are expected to refinance their debt over the next several months and form a new obligated group, cross-guaranteeing each other's debt. Standard & Poor's said an upgrade could be warranted because of their collective market share and operational efficiencies.