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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