S&P Global Ratings maintained 23 ratings without revising the outlooks, took five negative rating actions, and revised five outlooks favorably and three outlooks unfavorably without changing the ratings in the U.S. not-for-profit health care sector in September. There were no upgrades this month.
The month had six new debt issuances with existing ratings and outlooks unchanged; five were systems, the other was a stand-alone hospital, and all were rated investment grade. We also initially assigned a seventh new sale rating to a transaction that was guaranteed by Mayo Clinic.
The 13 rating actions and outlook revisions consisted of the following:
- Five downgrades--two systems and three stand-alone hospitals--two of which were defaults, one due to a distressed debt exchange and the other a missed interest payment.
- Five outlooks revised favorably on four stand-alone hospitals and one system, with four outlooks revised to stable from negative, and one to positive from stable.
- Three outlooks revised unfavorably on two systems and one stand-alone hospital, with two revised to negative from stable, and one to stable from positive.
Chart 1
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Table 1
U.S. not-for-profit health care rating action summary, year-to-date 2024 | |||||||
---|---|---|---|---|---|---|---|
First quarter | Second quarter | July | August | September | Third quarter | Year-to-date | |
Maintained | 63 | 78 | 27 | 18 | 23 | 68 | 209 |
Downgrades | 13 | 8 | 5 | 7 | 5 | 17 | 38 |
Upgrades | 3 | 4 | 0 | 2 | 0 | 2 | 9 |
Unfavorable outlook revisions | 4 | 13 | 0 | 3 | 3 | 6 | 23 |
Favorable outlook revisions | 8 | 10 | 6 | 4 | 5 | 15 | 33 |
Table 2
September 2024, U.S. not-for-profit health care rating actions | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
State | Rating | Outlook | Entity type | Action | Description | |||||||||
Adena Health System | OH | A- | Negative | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
AtlantiCare Health System | NJ | AA- | Negative | Stand-alone | Unfavorable outlook revision | Trend of operating losses that while improving are not aligned with rating level expectations | ||||||||
Baptist Health | AL | BBB+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Barlow Respiratory Hospital | CA | BBB | Stable | Stand-alone | Favorable outlook revision | Improved operating performance garnered positive operating margins and solid MADS coverage | ||||||||
Bexar County Hospital District | TX | AA | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Bibb County Healthcare Authority | AL | BB | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Bon Secours Health System | MD | A+ | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Bozeman Health | MT | A | Stable | Stand-alone | Favorable outlook revision | Positive interim operations and balance sheet accretion with the expectation for sustained improvement | ||||||||
Carle Foundation | IL | AA- | Negative | System | Maintained | Credit quality consistent with existing rating | ||||||||
Children's Hospital of Philadelphia | PA | AA | Stable | Stand-alone | Maintained; new sale | Credit quality consistent with existing rating | ||||||||
Covenant Healthcare System | MI | A+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Garnet Health Medical Center | NY | BB- | Negative | Stand-alone | Downgrade | Higher-than-budgeted loss expectations and further weakening in unrestricted reserves and balance sheet metrics | ||||||||
Genesis Healthcare System | OH | BB+ | Positive | Stand-alone | Favorable outlook revision | Strengthening operations and stabilized balance sheet from pension plan termination and successfully opened new facilities | ||||||||
Jackson Hospital and Clinic | AL | D | Not meaningful | Stand-alone | Downgrade | Missed interest payment following a notice of acceleration | ||||||||
LifeBridge Health | MD | A+ | Stable | System | Maintained; new sale | Credit quality consistent with existing rating | ||||||||
Long Island Community Hospital | NY | A | Stable | System | Maintained; new sale | Credit quality consistent with existing rating based on a subordinate guarantee from NYU Langone Hospitals | ||||||||
Mary Rutan Hospital | OH | A- | Stable | Stand-alone | Favorable outlook revision | Sustained financial performance and positive operating margins | ||||||||
Maury Regional Hospital | TN | BBB | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Mohawk Valley Health System | NY | BB | Negative | Stand-alone | Downgrade | Pressured operations and balance sheet stress with the opening of the new hospital | ||||||||
Montefiore Health System | NY | BBB- | Negative | System | Maintained; new sale | Credit quality consistent with existing rating | ||||||||
Moorings Park Institute | FL | A+ | Stable | Long-term care | Maintained | Credit quality consistent with existing rating | ||||||||
Noland Health Services | AL | A | Stable | Long-term care | Maintained | Credit quality consistent with existing rating | ||||||||
Northwell Health | NY | A- | Stable | System | Maintained; new sale | Credit quality consistent with existing rating | ||||||||
Norton Healthcare | KY | A | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
NYU Langone Hospitals | NY | A+ | Stable | System | Maintained; new sale | Credit quality consistent with existing rating | ||||||||
Oak Valley Hospital District | CA | BB | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
PAFAF|Phoenix LLC | AZ | AA | Stable | Other | Rating initially assigned; new sale | Based on an unconditional, absolute, and irrevocable guaranty from Mayo Clinic | ||||||||
PeaceHealth | WA | A- | Negative | System | Maintained | Credit quality consistent with existing rating | ||||||||
Renown Regional Medical Center | NV | A | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
San Antonio Regional Hospital | CA | BBB+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Southcoast Health System | MA | BBB+ | Stable | System | Favorable outlook revision | Healthy balance sheet with expected continued improvement in operating results to breakeven excluding provider relief funds | ||||||||
Texas Health Resources | TX | AA | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Tower Health | PA | D | Not meaningful | System | Downgrade | Based on our criteria, distressed debt exchange occurred and is viewed as a de facto default | ||||||||
UMass Memorial Health Care | MA | BBB+ | Stable | System | Unfavorable outlook revision | Weaker than projected fiscal 2023 earnings and integration and turnaround risks from an acquisition | ||||||||
University Hospitals Health System | OH | A | Negative | System | Unfavorable outlook revision | Multiyear trend of operating losses along with weakened unrestricted reserves and declining DCOH | ||||||||
UofL Health | KY | BBB+ | Negative | System | Downgrade | Decline in DCOH and unrestricted reserves to long-term debt below expectations along with softer operating margins | ||||||||
Vidant Health | NC | A | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
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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