SAN FRANCISCO – Standard & Poor's Ratings Services revised its outlook to positive from stable and affirmed its 'A+' underlying rating (SPUR) on MultiCare Health System, Wash.'s outstanding debt. At the same time, Standard & Poor's assigned its 'A+' long-term rating to Washington Health Care Facility Authority's $102.590 series 2010A revenue bonds, issued on behalf of the system. Finally, Standard & Poor's affirmed its 'AAA/A-1+' rating on MultiCare's outstanding debt.

The long-term rating is based on the joint support of an irrevocable direct pay letter of credit (LOC) provided by Wells Fargo Bank N.A. (AA/A-1+) and the SPUR of the obligor (A+).

"The positive outlook reflects our view of MultiCare's strong business position and excellent operating performance," said Standard & Poor's credit analyst Geraldine Poon. "We also expect MultiCare will maintain strong operating margins, although there will likely be a dip when the new facility opens."

"Given some relative balance sheet weakness, a rating upgrade in the next two years is contingent upon the successful completion of the Good Samaritan construction, some balance sheet improvement with cash-to-debt improving to more than 100%, continued sound cash flow, and no significant impact from additional competition," Ms. Poon said.

Bond proceeds will refund MultiCare's 1998 bonds.

In addition to a major $400 million investment at the Good Samaritan campus (new tower expected to be complete by early 2011), other planned spending includes continued information technology spending and expansion/renovation/infrastructure plans at MultiCare's existing campuses, as well as routine capital spending needs.

Located in Tacoma, Wash., (AA-) the MultiCare Health System includes three adult hospitals (Tacoma General Hospital, Allenmore Hospital, and Good Samaritan Hospital) and one pediatric hospital (Mary Bridge Children's Hospital) for a total of 818 licensed beds, seven outpatient surgery centers, two multi-specialty medical centers, and seven urgent care centers. In addition to its acute-care facilities, MultiCare has a relatively new outpatient facility in Gig Harbor that opened in mid-2007 and also maintains a medical group of 336 employed physicians.