S&P Global Ratings maintained 31 ratings without revising the outlooks, took one positive rating action, two negative rating actions, revised two outlooks favorably, and six outlooks unfavorably without changing the ratings in the U.S. not-for-profit health care sector in June. In addition, we placed one issuer on CreditWatch with negative implications due to lack of sufficient information and the potential for financial deterioration, and another issuer on CreditWatch with negative implications due to significantly weaker than expected unrestricted reserves.
Included in the above, were 10 new debt issuances in the month, accompanied by one downgrade and one unfavorable outlook revision. Five systems, four stand-alone hospitals, and one long-term care provider issued debt with the ratings ranging from 'BB' to 'AA'.
The 11 rating actions and outlook revisions consisted of the following:
- One upgrade on a stand-alone hospital in the 'A' category reflecting a finalized affiliation with a higher-rated hospital;
- Two downgrades--one system and one stand-alone hospital--with the stand-alone in the 'A' rating category and the system in the speculative grade category;
- Two outlooks revised favorably on one stand-alone hospital and one system, with both revised to stable from negative and in the speculative grade category; and
- Six outlooks revised unfavorably on three stand-alone hospitals, two systems, and one long-term-care facility, with five outlooks revised to negative from stable, and one to stable from positive.
Table 1
U.S. not-for-profit health care rating action summary, year-to-date 2024 | ||||||
---|---|---|---|---|---|---|
First Quarter | April | May | June | Second quarter | Year-to-date | |
Maintained | 63 | 22 | 25 | 31 | 78 | 141 |
Downgrades | 13 | 3 | 3 | 2 | 8 | 21 |
Upgrades | 3 | 1 | 2 | 1 | 4 | 7 |
Unfavorable outlook revisions | 4 | 0 | 7 | 6 | 13 | 17 |
Favorable outlook revisions | 8 | 2 | 6 | 2 | 10 | 18 |
Chart 1
Chart 2
Table 2
June 2024, U.S. Not-For-Profit Health Care Rating Actions | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
State | Rating | Outlook | Entity Type | Action | Description | |||||||||
Advocate Health | NC | AA | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Auxilio Mutuo | PR | BBB+ | Stable | Standalone | Unfavorable outlook revision | An unexpected acquisition accompanied by additional debt while working through a cyber incident | ||||||||
Baptist Health Care | FL | BBB | Negative | Standalone | Unfavorable outlook revision | Significantly diminished balance sheet after completion of a hospital replacement project | ||||||||
Beacon Health System | IN | AA- | Negative | System | Maintained | Credit quality consistent with existing rating | ||||||||
Catholic Health Services of Long Island | NY | A- | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Catholic Health System | NY | B- | Stable | System | Favorable outlook revision | Improved operating performance and expected compliance with the forbearance agreement | ||||||||
Children's Health Care | MN | AA- | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Covenant Health | TN | A | Negative | System | Unfavorable outlook revision | Persistent operating losses and overall weak performance | ||||||||
Enloe Medical Center | CA | BBB- | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Freeman Health System | MO | A+ | Stable | Standalone | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Froedtert ThedaCare Health | WI | AA | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Goshen Health | IN | BBB+ | Negative | Standalone | Unfavorable outlook revision | Significant operating losses and weakening balance sheet | ||||||||
Hamilton Health Care System | GA | A+ | Stable | Standalone | Downgrade; New sale | Materially lower pro forma cash to debt metrics, higher debt burden, and integration risk from recent acquisition | ||||||||
Highland Hospital of Rochester | NY | A | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Holland Community Hospital | MI | A+ | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Hunterdon Medical Center | NJ | A- | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Jackson Hospital and Clinic | AL | BB- | Creditwatch Negative | Standalone | Placed on CreditWatch Negative | Lack of sufficient information and potential for financial deterioration | ||||||||
Jupiter Health | FL | BBB- | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Kendal at Ithaca | NY | BBB+ | Stable | Long-term care | Maintained | Credit quality consistent with existing rating | ||||||||
Kuakini Health System | HI | CCC- | Negative | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Lucile Salter Packard Children's Hospital | CA | A+ | Stable | Standalone | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Marshfield Clinic | WI | BBB | Negative | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Mayo Clinic | MN | AA | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Memorial Health Services | CA | AA- | Negative | System | Maintained | Credit quality consistent with existing rating | ||||||||
Memorial Hermann Health System* | TX | AA- | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Memorial Hospital and Health Care Center | IN | A+ | Stable | Standalone | Upgrade | Finalized affiliation with Deaconess Health System as the sole and controlling member of Memorial | ||||||||
Methodist Hospitals | IN | BB+ | Stable | Standalone | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Methodist Hospitals of Dallas | TX | AA- | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
PIH Health | CA | A | Negative | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Rush System for Health | IL | A+ | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Saint Josephs Health | NJ | BBB- | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Samaritan Medical Center | NY | BB | Stable | Standalone | Favorable outlook revision | Meaningful operational and DCOH improvement | ||||||||
San Juan Regional Medical Center | NM | BBB+ | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Shell Point | FL | BBB+ | Negative | Long-term care | Unfavorable outlook revision; New sale | Material debt issuance with limited debt capacity and uncertainty surrounding potential additional debt | ||||||||
South Broward Hospital District | FL | AA | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Southern Mono Healthcare District | CA | A- | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
SSM Health Care System | MO | A+ | Negative | System | Unfavorable outlook revision | Unexpected sizable operating loss in fiscal 2023 and declining DCOH | ||||||||
Terrebonne General Medical Center | LA | A | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
Tower Health | PA | CC | Negative | System | Downgrade | Announcement to engage in what we view as a distressed restructuring | ||||||||
University of Wisconsin Hospital and Clinics Authority | WI | AA- | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Valley View Hospital | CO | A | Stable | Standalone | Maintained | Credit quality consistent with existing rating | ||||||||
West Virginia University Health System | WV | A | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Westchester County Health Care | NY | BBB- | Creditwatch Negative | System | Placed on CreditWatch Negative | Significantly weaker-than-expected unrestricted reserves | ||||||||
Westhills Village Retirement Community | SD | A+ | Stable | Long-term care | Maintained | Credit quality consistent with existing rating | ||||||||
*This action relates to a new sale issuance for variable rate demand bonds (VRDBs) following a review completed in May. DCOH--Days' cash on hand. |
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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