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U.S. Not-For-Profit Health Care Rating Actions, June And Second Quarter 2024

S&P Global Ratings maintained 31 ratings without revising the outlooks, took one positive rating action, two negative rating actions, revised two outlooks favorably, and six outlooks unfavorably without changing the ratings in the U.S. not-for-profit health care sector in June. In addition, we placed one issuer on CreditWatch with negative implications due to lack of sufficient information and the potential for financial deterioration, and another issuer on CreditWatch with negative implications due to significantly weaker than expected unrestricted reserves.

Included in the above, were 10 new debt issuances in the month, accompanied by one downgrade and one unfavorable outlook revision. Five systems, four stand-alone hospitals, and one long-term care provider issued debt with the ratings ranging from 'BB' to 'AA'.

The 11 rating actions and outlook revisions consisted of the following:

  • One upgrade on a stand-alone hospital in the 'A' category reflecting a finalized affiliation with a higher-rated hospital;
  • Two downgrades--one system and one stand-alone hospital--with the stand-alone in the 'A' rating category and the system in the speculative grade category;
  • Two outlooks revised favorably on one stand-alone hospital and one system, with both revised to stable from negative and in the speculative grade category; and
  • Six outlooks revised unfavorably on three stand-alone hospitals, two systems, and one long-term-care facility, with five outlooks revised to negative from stable, and one to stable from positive.

Table 1

U.S. not-for-profit health care rating action summary, year-to-date 2024
First Quarter April May June Second quarter Year-to-date
Maintained 63 22 25 31 78 141
Downgrades 13 3 3 2 8 21
Upgrades 3 1 2 1 4 7
Unfavorable outlook revisions 4 0 7 6 13 17
Favorable outlook revisions 8 2 6 2 10 18

Chart 1

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Chart 2

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Table 2

June 2024, U.S. Not-For-Profit Health Care Rating Actions
State Rating Outlook Entity Type Action Description
Advocate Health NC AA Stable System Maintained Credit quality consistent with existing rating
Auxilio Mutuo PR BBB+ Stable Standalone Unfavorable outlook revision An unexpected acquisition accompanied by additional debt while working through a cyber incident
Baptist Health Care FL BBB Negative Standalone Unfavorable outlook revision Significantly diminished balance sheet after completion of a hospital replacement project
Beacon Health System IN AA- Negative System Maintained Credit quality consistent with existing rating
Catholic Health Services of Long Island NY A- Stable System Maintained Credit quality consistent with existing rating
Catholic Health System NY B- Stable System Favorable outlook revision Improved operating performance and expected compliance with the forbearance agreement
Children's Health Care MN AA- Stable Standalone Maintained Credit quality consistent with existing rating
Covenant Health TN A Negative System Unfavorable outlook revision Persistent operating losses and overall weak performance
Enloe Medical Center CA BBB- Stable Standalone Maintained Credit quality consistent with existing rating
Freeman Health System MO A+ Stable Standalone Maintained; New sale Credit quality consistent with existing rating
Froedtert ThedaCare Health WI AA Stable System Maintained; New sale Credit quality consistent with existing rating
Goshen Health IN BBB+ Negative Standalone Unfavorable outlook revision Significant operating losses and weakening balance sheet
Hamilton Health Care System GA A+ Stable Standalone Downgrade; New sale Materially lower pro forma cash to debt metrics, higher debt burden, and integration risk from recent acquisition
Highland Hospital of Rochester NY A Stable Standalone Maintained Credit quality consistent with existing rating
Holland Community Hospital MI A+ Stable Standalone Maintained Credit quality consistent with existing rating
Hunterdon Medical Center NJ A- Stable Standalone Maintained Credit quality consistent with existing rating
Jackson Hospital and Clinic AL BB- Creditwatch Negative Standalone Placed on CreditWatch Negative Lack of sufficient information and potential for financial deterioration
Jupiter Health FL BBB- Stable Standalone Maintained Credit quality consistent with existing rating
Kendal at Ithaca NY BBB+ Stable Long-term care Maintained Credit quality consistent with existing rating
Kuakini Health System HI CCC- Negative Standalone Maintained Credit quality consistent with existing rating
Lucile Salter Packard Children's Hospital CA A+ Stable Standalone Maintained; New sale Credit quality consistent with existing rating
Marshfield Clinic WI BBB Negative System Maintained; New sale Credit quality consistent with existing rating
Mayo Clinic MN AA Stable System Maintained Credit quality consistent with existing rating
Memorial Health Services CA AA- Negative System Maintained Credit quality consistent with existing rating
Memorial Hermann Health System* TX AA- Stable System Maintained; New sale Credit quality consistent with existing rating
Memorial Hospital and Health Care Center IN A+ Stable Standalone Upgrade Finalized affiliation with Deaconess Health System as the sole and controlling member of Memorial
Methodist Hospitals IN BB+ Stable Standalone Maintained; New sale Credit quality consistent with existing rating
Methodist Hospitals of Dallas TX AA- Stable System Maintained Credit quality consistent with existing rating
PIH Health CA A Negative System Maintained; New sale Credit quality consistent with existing rating
Rush System for Health IL A+ Stable System Maintained Credit quality consistent with existing rating
Saint Josephs Health NJ BBB- Stable Standalone Maintained Credit quality consistent with existing rating
Samaritan Medical Center NY BB Stable Standalone Favorable outlook revision Meaningful operational and DCOH improvement
San Juan Regional Medical Center NM BBB+ Stable Standalone Maintained Credit quality consistent with existing rating
Shell Point FL BBB+ Negative Long-term care Unfavorable outlook revision; New sale Material debt issuance with limited debt capacity and uncertainty surrounding potential additional debt
South Broward Hospital District FL AA Stable System Maintained Credit quality consistent with existing rating
Southern Mono Healthcare District CA A- Stable Standalone Maintained Credit quality consistent with existing rating
SSM Health Care System MO A+ Negative System Unfavorable outlook revision Unexpected sizable operating loss in fiscal 2023 and declining DCOH
Terrebonne General Medical Center LA A Stable Standalone Maintained Credit quality consistent with existing rating
Tower Health PA CC Negative System Downgrade Announcement to engage in what we view as a distressed restructuring
University of Wisconsin Hospital and Clinics Authority WI AA- Stable System Maintained; New sale Credit quality consistent with existing rating
Valley View Hospital CO A Stable Standalone Maintained Credit quality consistent with existing rating
West Virginia University Health System WV A Stable System Maintained Credit quality consistent with existing rating
Westchester County Health Care NY BBB- Creditwatch Negative System Placed on CreditWatch Negative Significantly weaker-than-expected unrestricted reserves
Westhills Village Retirement Community SD A+ Stable Long-term care Maintained Credit quality consistent with existing rating
*This action relates to a new sale issuance for variable rate demand bonds (VRDBs) following a review completed in May. DCOH--Days' cash on hand.

This report does not constitute a rating action.

Primary Credit Analyst:Blake C Fundingsland, Englewood + 1 (303) 721 4703;
blake.fundingsland@spglobal.com
Secondary Contacts:Cynthia S Keller, Augusta + 1 (212) 438 2035;
cynthia.keller@spglobal.com
Suzie R Desai, Chicago + 1 (312) 233 7046;
suzie.desai@spglobal.com
Amy He, New York +1 2124380381;
amy.he@spglobal.com

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