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U.S. Not-For-Profit Health Care Rating Actions, September And Third Quarter 2024

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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Chart 2

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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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