S&P Global Ratings maintained 18 ratings without revising the outlooks, took two positive rating actions, seven negative rating actions, revised four outlooks favorably, and three outlooks unfavorably without changing the ratings in the U.S. not-for-profit health care sector in August.
Included in the above, were seven new debt issuances in the month, accompanied by two downgrades, one favorable outlook revision, and one initially assigned rating to Hendricks Regional Health in Indiana. Four systems, two stand-alone hospitals, and one long-term care provider issued debt with the ratings ranging from 'BBB+' to 'AA-'.
The 16 rating actions and outlook revisions consisted of the following:
- Two upgrades on stand-alone hospitals, both in the speculative grade rating category;
- Seven downgrades--three systems and four stand-alone hospitals--with all but two ratings remaining investment grade;
- Four outlooks revised favorably on two systems, one stand-alone hospital, and one long-term-care facility, with two outlooks revised to stable from negative, one revised to positive from stable, and one revised to positive from negative; and
- Three outlooks revised unfavorably on two stand-alone hospitals and one system, with all outlooks revised to negative from stable.
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August 2024, U.S. not-for-profit health care rating actions | ||||||||||||||
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State | Rating | Outlook | Entity type | Action | Description | |||||||||
Antelope Valley Medical Center | CA | BBB | Negative | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Asante Health System | OR | A+ | Negative | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Catholic Medical Center | NH | BB+ | Stable | Stand-alone | Downgrade | Multiyear trend of sizeable losses and deteriorating balance sheet with weak MADS coverage | ||||||||
Conway Regional Medical Center | AR | BBB+ | Negative | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Covenant Health | MA | BBB- | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Craig Hospital | CO | A+ | Negative | Stand-alone | Unfavorable outlook revision | Large-scale capital plans could pressure financial profile and debt metrics depending on funding sources | ||||||||
Doylestown Hospital | PA | B+ | Positive | Stand-alone | Upgrade | Alleviation of near-term liquidity risk and narrower operating losses with positive outlook reflecting a signed definitive agreement | ||||||||
Emanate Health | CA | A | Negative | Stand-alone | Unfavorable outlook revision | Lower volumes, elevated capital spending, and a multi-year decline in DCOH limit operating flexibility | ||||||||
Glencoe Regional Health Serivces | MN | BBB- | Stable | Stand-alone | Downgrade | Ongoing negative operations, weak DCOH, and expected cash decline given elevated capital spending expected | ||||||||
Guadalupe Regional Medical Center | TX | BB | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Hendricks Regional Health | IN | A- | Stable | Stand-alone | Rating initially assigned; New sale | Rating initially assigned based on positive operating margins, favorable payor mix, and a fair balance sheet metrics | ||||||||
Hospital For Special Surgery | NY | A+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Hospital Sisters Services | IL | A+ | Negative | System | Maintained | Credit quality consistent with existing rating | ||||||||
Houston County Health Care Authority | AL | BBB+ | Positive | Stand-alone | Favorable outlook revision | Sustained strong operating performance could potentially strengthen the overall financial profile position | ||||||||
Jackson Hospital and Clinic | AL | CC | Creditwatch Negative | Stand-alone | Downgrade | Elevated risk of nonpayment to bondholders following notice of acceleration and very thin liquidity based on limited unaudited financial data | ||||||||
Johns Hopkins Health System | MD | AA- | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Mount Sinai Hospital | NY | BBB | Negative | System | Downgrade | Balance sheet erosion coupled with accelerated and sizable operating losses | ||||||||
Nebraska Medicine | NE | AA- | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Northwestern Memorial HealthCare | IL | AA+ | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Nuvance Health | CT | BBB | Positive | System | Favorable outlook revision | Definitive agreement to merge with Northwell Health | ||||||||
OU Medicine | OK | BB | Stable | Stand-alone | Upgrade | Healthy operating profitability, tapering capital expenditures, and expected sustained cash flow improvement | ||||||||
Parkview Health System | IN | A+ | Stable | System | Downgrade; New sale | Continuous decline in operations and DCOH | ||||||||
Prisma Health | SC | A | Stable | System | Favorable outlook revision | Strong financial recovery that improved unrestricted reserves and rebuilt balance sheet cushion | ||||||||
Redlands Community Hospital | CA | A- | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Rochester Regional Health | NY | BBB+ | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Saint Francis Healthcare System | MO | A+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Shell Point | FL | BBB+ | Stable | Long-term care | Favorable outlook revision; New sale | Robust service demand and solid operating liquidity help keep pro forma metrics in line with rating expectations | ||||||||
Sky Lakes Medical Center | OR | A- | Negative | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
SouthEast Alaska Regional Health Consortium | AK | A- | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Texas Children's Hospital | TX | AA- | Stable | System | Downgrade; New Sale | Substantial losses and pressured performance that further weakened the overall financial profile | ||||||||
University of Kansas Hospital Authority | KS | AA- | Negative | System | Unfavorable outlook revision | Recent merger operational challenges are pressuring profitability, reserves, and liquidity | ||||||||
Vail Health | CO | A- | Stable | Stand-alone | Downgrade | Deteriorating balance-sheet metrics given greater-than-expected operating losses | ||||||||
Valley Health System* | VA | A+ | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Woman's Hospital Foundation | LA | A | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Yuma Regional Medical Center | AZ | A | Stable | Stand-alone | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
*This action relates to a new sale issuance for variable-rate demand bonds following a review completed in July. DCOH--Days' cash on hand. MADS--Maximum annual debt service. |
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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