NEW YORK – Standard & Poor's Ratings Services has revised its outlook on Nashville, Tenn.-based HCA, Inc., to positive from stable and affirmed all of the for-profit hospital giant's bond ratings.

"The outlook revision reflects the considerable turnaround in cash flow from 2008 and its demonstrated ability to refinance the now $14.5 billion of debt maturing in the years 2010 through 2014," said David Lugg, a credit analyst for New York-based Standard & Poor's.

Lugg said HCA's liquidity is adequate to repay the $1.9 billion of debt maturing in 2010 and 2011 without new financing. He said HCA's corporate credit rating would remain 'B+', although the company faces a still-significant refinancing challenge in 2012-2013.

According to Lugg, the speculative-grade rating on HCA continues to reflect S&P's concern that the company is particularly sensitive to reduced capacity use and pricing, by virtue of the significant debt leverage assumed in its November 2006 leveraged buyout.

HCA has a large portfolio of 166 hospitals and 105 ambulatory surgery centers and, S&P notes, enjoys relatively strong negotiating positions with private insurance companies in these markets.

Nevertheless, the company is susceptible to regional variations in demand, particularly in Florida and Texas. S&P believes managed care price increases, which exceeded 6 percent in 2008, should average about the same amount in 2009.

Lugg said the ongoing economic weakness within HCA's regions could magnify a slackening demand for elective procedures should it occur, while regional concentrations could amplify the effects of a national increase in the level of uncompensated care.