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U.S. Not-For-Profit Health Care Rating Actions, October 2024

S&P Global Ratings affirmed 20 ratings without revising the outlooks, took two positive rating actions and four negative rating actions, and revised five outlooks favorably and one outlook unfavorably without changing the ratings, in the U.S. not-for-profit health care sector in October.

Additionally, we placed Eastern Maine Healthcare Systems in Maine on CreditWatch with negative implications reflecting weak financial performance, and revised the outlook to developing from negative on Marshfield Clinic in Wisconsin with upside rating potential related to its pending merger with Sanford Health and the downside reflecting a pressured financial profile.

There were two new ratings assigned this month to Concord Hospital in New Hampshire (issuer credit rating), and Beaufort Memorial Hospital in South Carolina (new sale). There were five additional new debt issuances in the month, with four ratings and outlooks unchanged, and one issuer outlook revised favorably; four were systems, the other was a stand-alone hospital, and all were rated 'A' or 'AA'.

The 12 rating actions and outlook revisions consisted of the following:

  • Four downgrades on two systems, one stand-alone hospital, and one steam and chilled water supplier;
  • Two upgrades on two stand-alone hospitals with both upgrades related to application of our Group Rating Methodology Criteria after being acquired by higher rated systems;
  • Five outlooks revised favorably on one long-term care provider, three stand-alone hospitals, and one health care system, with all outlooks revised to stable from negative; and
  • One unfavorable outlook revision to negative from stable on a stand-alone hospital in the 'AA' category due to operating losses and reduced cash flow.

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Chart 2

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October 2024, U.S. not-for-profit health care rating actions
State Rating Outlook Entity type Action Description

Ann & Robert H. Lurie Children's Hospital of Chicago

IL AA- Negative Stand-alone Unfavorable outlook revision Trend of heightened operating losses and reduced cash flow

Army Retirement Residence Foundation

TX BB+ Stable Long-term care Favorable outlook revision Completed redevelopment led to higher occupancy and improved MADS and expected cash flow growth

Ascension Health Alliance

MO AA Stable System Downgrade Weakening financial profile from persistent operational challenges and weak DCOH

Beaufort Memorial Hospital

SC BB Stable Stand-alone Rating initially assigned; New sale Rating initially assigned based on leading market position with improving margins and lighter balance sheet

Cape Cod Healthcare

MA A Stable Stand-alone 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

Christ Hospital

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

Community Hospital of Central California

CA BBB+ Stable Stand-alone Favorable outlook revision Positive operating margins as a result of over $400MM in FEMA funds and underlying operational improvements. 

Concord Hospital

NH A+ Stable System Rating initially assigned Rating initially assigned based on a strong financial profile and leading market position

Cottage Health

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

Eastern Maine Healthcare Systems

ME BBB- CreditWatch Negative System Placed on CreditWatch Negative Sizable operating loss with potential covenant violation and weak DCOH

Froedtert ThedaCare Health

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

Jennie Stuart Medical Center

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

Kettering Health Network

OH A+ Stable System Maintained Credit quality consistent with existing rating

Kootenai Health

ID A Stable Stand-alone Favorable outlook revision Sustained financial recovery with unrestricted reserves and operating margin growth

Lee Memorial Health System

FL A+ Stable System Maintained Credit quality consistent with existing rating

Lehigh Valley Health Network

PA A Stable System Downgrade Based on merger with Thomas Jefferson University

Louisville Medical Center

KY BBB+ Negative Other* Downgrade Based on the downgrade of UofL Health and our application of "Rating Approach To Obligations With Multiple Revenue Stream"

Magnolia Regional Health Center

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

Marshfield Clinic

WI BBB Developing System Placed on Developing Outlook Signed definitive agreement in affiliation with Sanford Health

Milford Regional Medical Center

MA BBB Stable Stand-alone Upgrade Acquisition by UMass Memorial Health Care and highly strategic position under GRM criteria

MultiCare Health System

WA A Stable System Maintained Credit quality consistent with existing rating

OhioHealth

OH AA+ Stable System Maintained Credit quality consistent with existing rating

OSF Healthcare System

IL A Stable System Maintained; New sale Credit quality consistent with existing rating

Overlake Hospital Medical Center

WA A Stable Stand-alone Upgrade Based our GRM criteria, credit profile enhanced through merger with MultiCare Health System

Southeast Georgia Health System

GA BBB Stable Stand-alone Favorable outlook revision Improved operating results with general stability in unrestricted reserves after a successful turnaround effort 

St Francis Health System

OK AA+ Stable System Maintained Credit quality consistent with existing rating

Thomas Jefferson University

PA A Stable System Favorable outlook revision; New sale Improving operating performance and assessment of merger with Lehigh Valley Health Network

UMass Memorial Health Care

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

UNC Health

NC AA Stable System Maintained Credit quality consistent with existing rating

UNC Southeastern Regional Medical Center

NC BB- Negative Stand-alone Downgrade Uneven operating performance with extremely low DCOH and cash-to-debt metrics

University of North Carolina Rex Healthcare

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

University of Pennsylvania Health System

PA AA Stable System Maintained Credit quality consistent with existing rating

Valley Health System

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

Vanderbilt University Medical Center

TN A Stable System Maintained; New sale Credit quality consistent with existing rating

Virginia Hospital Center

VA A+ Stable Stand-alone Maintained Credit quality consistent with existing rating
DCOH--Days' cash on hand. MADS--Maximum annual debt service. GRM--Group Rating Methodology. *Louisville Medical Center supplies steam and chilled water to users on the Medical Center campus.

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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