Standard & Poor's Corp. last week issued its criteria on rating health care institutions that have recently merged with other facilities.

The rating agency's analysis of merged institutions goes beyond expectations for future financial performance of the merged entity, noted David Peknay, a director at Standard & Poor's.

In last week's Credit Week Municipal, Standard & Poor's said its rating approach to merger situations includes an evaluation of the reasons for the merger, the structure of the new system, and credit strengths and weaknesses of the institutions that formed the combined entity.

Standard & Poor's said it also assesses the competitive environment of the recently merged institution, specific characteristics of a health care market, and the impact of the merger on the delivery of health care.

Peknay said the rating agency released the criteria to inform issuers about changed evaluation procedures in response to increasing consolidation of the health care industry.

Reasons for mergers include improving or protecting market position, gaining access to a broad health care delivery network, providing access to more affordable capital, and gaining access to a strong or unique medical staff, Standard & Poor's said.

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