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U.S. Not-For-Profit Health Care Rating Actions, July 2024

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.

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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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