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U.S. Not-For-Profit Health Care Rating Actions, February 2025

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U.S. Not-For-Profit Health Care Rating Actions, February 2025

S&P Global Ratings maintained 20 ratings without revising the outlooks, took one positive rating action and three negative rating actions, revised two outlooks favorably without changing the ratings, and revised two outlooks unfavorably without changing the ratings in the U.S. not-for-profit health care sector in February.

Included in the three negative rating actions was Northern Hospital District of Surry County, N.C., that was downgraded and placed on CreditWatch with negative implications due to financial deterioration and two covenant violations. Mount Sinai Hospital, N.Y. was also placed on CreditWatch with negative implications due to sizable and accelerating operating losses. There was one new credit rating assigned this month to a new sale transaction for Rady’s Children’s Hospital, Calif. after its merger with Children's Hospital of Orange County. There were four additional new sale issuances in the month, with all ratings and outlooks remaining unchanged.

The eight rating actions and outlook revisions consisted of the following:

  • One upgrade on Children's Hospital of Orange County, Calif. related to the application of our "Group Rating Methodology Criteria" (published May 7, 2013, on RatingsDirect) after it merged with Rady's Children's Hospital;
  • Three downgrades on one system and two stand-alone hospitals, all in the speculative-grade category;
  • Two favorable outlook revisions on one system and one stand-alone hospital, with all outlooks revised to positive from stable; and
  • Two unfavorable outlook revisions on one human service provider and one stand-alone hospital, with both outlooks revised to negative from stable.

February 2025 U.S. not-for-profit health care rating actions
State Rating Outlook Entity Type Action Description

Aspirus

WI AA- Stable System Maintained; new sale Credit quality consistent with existing rating

Ballad Health

TN A- Stable System Maintained Credit quality consistent with existing rating

Banner Health*

AZ AA- Stable System Maintained; new sale Credit quality consistent with existing rating

Baptist Health South Florida

FL AA- Stable System Maintained Credit quality consistent with existing rating

Baylor Scott & White Health

TX AA- Stable System Maintained Credit quality consistent with existing rating

BJC Health System

MO AA Stable System Maintained; new sale Credit quality consistent with existing rating

Cheyenne Regional Medical Center

WY A+ Stable Stand-alone Maintained Credit quality consistent with existing rating

Children's Hospital Los Angeles

CA BB+ Negative Stand-alone Downgrade Significant multiyear operating losses with waning unrestricted reserves

Children's Hospital of Orange County

CA AA Stable System Upgrade Based our GRM criteria, credit profile enhanced through merger with Rady's Children's Hospital

Comanche County Memorial Hospital

OK BB+ Stable Stand-alone Maintained Credit quality consistent with existing rating

Crawford County Hospital District

IL BBB Stable Stand-alone Maintained Credit quality consistent with existing rating

Eastern Maine Healthcare Systems

ME BB- Negative System Downgrade Persistent operating losses that led to DSC covenant violations and reliance on external funds for operating liquidity

Faith Regional Health Services

NE BBB Stable Stand-alone Maintained Credit quality consistent with existing rating

FirstHealth of the Carolinas

NC AA- Stable Stand-alone Maintained Credit quality consistent with existing rating

Front Porch Communities and Services

CA A- Stable Long-term care Maintained Credit quality consistent with existing rating

Lawrence General Hospital

MA B- Negative Stand-alone Unfavorable outlook revision Weakened balance sheet, elevated debt, and integration risk with recent acquisitions

Lexington Health

SC A Stable Stand-alone Maintained Credit quality consistent with existing rating

Lifespan

RI BBB+ Stable System Maintained Credit quality consistent with existing rating

Memorial Sloan Kettering Cancer Center

NY AA- Stable Stand-alone Maintained Credit quality consistent with existing rating

Mental Health Center of Denver

CO BBB Negative Human Service Providers Unfavorable outlook revision Trend of negative operating margins with decline in unrestricted reserves and DCOH

Morris Hospital

IL BBB+ Positive Stand-alone Favorable outlook revision Consistently healthy operating margin with growing DCOH and a robust balance sheet
Mount Sinai Hospital NY BBB CreditWatch Negative System Placed on CreditWatch Negative Ongoing operating losses, weakening balance sheet, and significantly higher transfers to affiliates

Northern Hospital District of Surry County

NC B CreditWatch Negative Stand-alone Downgrade Deteriorating financial profile anticipating DSC and DCOH covenant violation in fiscal 2024

ProMedica Health System

OH BB Positive System Favorable outlook revision Continued operational improvement and increase in unrestricted reserves
Rady Children's Hospital and Health Center CA AA Stable System Ratings initially assigned; new sale Rating initially assigned based on dominant market share with excellent operating margins and balance sheet

Southern Illinois Healthcare Enterprises

IL A- Stable System Maintained Credit quality consistent with existing rating

Tarrant County Hospital District

TX AA Stable Stand-alone Maintained Credit quality consistent with existing rating

UNC Health Appalachian

NC BBB- Negative Stand-alone Maintained Credit quality consistent with existing rating

University of Maryland Medical System**

MD A Stable System Maintained; new sale Credit quality consistent with existing rating

WellStar Health System

GA A+ Stable System Maintained Credit quality consistent with existing rating
*This action relates to a new sale issuance for a taxable commercial paper (CP) with the assignment of an 'A-1+' short-term rating following a review completed in November. **This action relates to a new sale issuance for variable rate demand bonds (VRDBs) following a review completed in December. DSC--Debt service coverage. DCOH--Days' cash on hand. GRM--Group Rating Methodology.

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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:Suzie R Desai, Chicago + 1 (312) 233 7046;
suzie.desai@spglobal.com
Amy He, New York +1 2124380381;
amy.he@spglobal.com
Cynthia S Keller, Augusta + 1 (212) 438 2035;
cynthia.keller@spglobal.com

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