S&P Global Ratings maintained 27 ratings without revising the outlooks, took five negative rating actions, and revised six outlooks favorably without changing the ratings in the U.S. not-for-profit health care sector in July. We also placed one issuer on CreditWatch with developing implications, signaling a potential rating impact dependent on the closure of a proposed affiliation.
Thirteen new debt issuances occurred in the month, including one new issuer with an initially assigned rating and two favorable outlook revisions. Eleven of these new sales were done by systems, with the remainder being stand-alone hospitals. There were no upgrades or unfavorable outlook revisions this month.
The 11 rating actions and outlook revisions consisted of the following:
- Five downgrades--one system and four stand-alone hospitals--with half of the stand-alone hospitals in the 'A' rating category and the other half in the speculative-grade category; and
- Six outlooks revised favorably on three stand-alone hospitals, along with two systems and one long-term-care facility, with two outlooks revised to stable from negative, and four to positive from stable.
Chart 1
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Table 1
July 2024, U.S. not-for-profit health care rating actions | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
State | Rating | Outlook | Entity Type | Action | Description | |||||||||
Adventist Healthcare |
MD | BBB | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
AHS Hospital |
NJ | AA- | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
AnMed Health System and Affiliates |
SC | A+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Arkansas Children's Hospital |
AR | AA- | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Baptist Health System, Inc. of Jacksonville |
FL | AA | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Brooks Rehabilitation |
FL | A- | Stable | Stand-alone | Favorable outlook revision | Operating losses stabilizing near historic levels combined with robust operational liquidity | ||||||||
Carson Valley Medical Center |
NV | BB+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Children's Hospital of Alabama |
AL | AA- | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Concordia Lutheran Ministries |
PA | AA- | Positive | Long-Term Care | Favorable outlook revision | Trend of improved operations, robust balance sheet with healthy cash to debt metrics | ||||||||
Corewell Health |
MI | AA | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
El Paso County Hospital District |
TX | BBB+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Erlanger Health |
TN | A | Stable | System | Rating initially assigned; New sale | Rating initially assigned based on leading market position with excellent operating margins and cash flow | ||||||||
Hackensack Meridian Health |
NJ | AA- | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Halifax Hospital Medical Center |
FL | A- | Stable | Stand-alone | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Holy Redeemer Health System |
PA | B+ | Negative | Stand-alone | Downgrade | Significant multiyear operating losses, deteriorating balance sheet metrics, and DSC covenant violation | ||||||||
Indiana University Health |
IN | AA | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Inova Health System |
VA | AA+ | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Jackson Hospital and Clinic |
AL | CCC+ | Creditwatch Negative | Stand-alone | Downgrade | Technical EOD from failure to make bond-related payments, thin liquidity, and lack of timely and reliable financial information | ||||||||
John Muir Health |
CA | A+ | Negative | Stand-alone | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Kaiser Foundation Hospitals (Kaiser Permanente)* |
CA | AA- | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
King's Daughters Medical Center |
KY | A- | Positive | Stand-alone | Favorable outlook revision | Beyond expected performance with improving unrestricted reserves and DCOH | ||||||||
Louisiana Children's Medical Center |
LA | A | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
MaineHealth |
ME | A+ | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
McLeod Health |
SC | AA | Stable | System | Favorable outlook revision; New sale | Sustained operating margin improvement and strengthened balance sheet ratios | ||||||||
Memorial Hermann Health System** |
TX | AA- | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Memorial Hospital |
NH | A | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Nebraska Methodist Health System |
NE | A | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Northeast Georgia Health System |
GA | A | Positive | System | Favorable outlook revision; New sale | Continued improving operating performance with an expected enhanced market position | ||||||||
Overlake Hospital Medical Center |
WA | BBB+ | Creditwatch Developing | Stand-alone | Placed on CreditWatch Developing | Potential rating impact dependent on the closure of a proposed affiliation with MultiCare | ||||||||
Penn Highlands Healthcare |
PA | BBB | Creditwatch Negative | System | Downgrade | Performance remains weak as reserves decline, with a potential DSC covenant violation | ||||||||
ProHealth Care |
WI | A+ | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Saint Peter's University Hospital |
NJ | BBB | Positive | Stand-alone | Favorable outlook revision | Definitive agreement with Atlantic Health System (AHS) | ||||||||
Sarah Bush Lincoln Health System |
IL | A+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
St Clair Memorial Hospital of Pittsburgh |
PA | A+ | Stable | Stand-alone | Downgrade | Expectation that two years of negative operating income will persist given volume declines | ||||||||
Tucson Medical Center |
AZ | A- | Stable | Stand-alone | Downgrade | Lower than expected operations and weak balance sheet inconsistent with prior rating level | ||||||||
Tufts Medicine |
MA | BBB- | Negative | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
University of Colorado Hospital Authority |
CO | AA | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
University of Wisconsin Hospital and Clinics Authority*** |
WI | AA- | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Valley Children's Hospital |
CA | AA- | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Valley Health System |
VA | A+ | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
*Legacy Geisinger Health debt was affirmed in July, as it is secured by Kaiser Foundation Hospitals (effective March 31, 2024) and will no longer be listed under Geisinger Health. | ||||||||||||||
**This action relates to a new sale issuance for a taxable commercial paper (CP) note following a review completed in May. | ||||||||||||||
***This action relates to a new sale issuance for variable-rate demand revenue refunding bonds following a review completed in June. | ||||||||||||||
DSC--Debt service coverage. EOD--Event of default. 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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