Chicago's oldest hospital, 314-bed Mercy Hospital and Medical Center, saw its credit rating downgraded to D from CCC by Standards & Poor's after the hospital missed a $3 million principal payment on bonds due Jan. 1. S&P declared the standalone Catholic hospital in default, only the second default notice the ratings agency has issued in the past three years, and said its outlook on the hospital's finances is negative. The downgrade affects $64.6 million in bonds. Although the hospital reduced operating losses to $6.8 million in fiscal 2003, ended June 30, from $7.7 million in fiscal 2002, the improvement has not been enough, S&P said. Last August Mercy was in talks to sell to a partnership of Resurrection Health Care, Chicago, and Sisters of St. Francis Health Services, Mishawaka, Ind., but the deal fizzled. -- by Mark Taylor
S&P declares Chicago hospital in default
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