S&P Global Ratings maintained 16 ratings in the U.S. not-for-profit health care sector without revising the outlooks and took one positive rating action and three negative rating actions in January. In addition, we revised two outlooks favorably and two outlooks unfavorably without changing the ratings during that month.
Additionally, we took three rating actions related to mergers and acquisitions. We placed Marshfield Clinic in Wisconsin on CreditWatch with positive implications related to its merger with Sanford Health and assigned developing outlooks to two stand-alone hospitals: Grand View Hospital in Pa. due to a definitive agreement with St. Luke's University Health Network, and Catholic Medical Center, N.H. given its proposed acquisition by for-profit Healthcare Corp. of America, which has since closed.
Four existing organizations issued debt with three of the ratings and outlooks unchanged, and one outlook revised unfavorably.
The eight rating actions and outlook revisions consisted of the following:
- One upgrade on Scotland Memorial Hospital, N.C.;
- Three downgrades on one system and two stand-alone hospitals in the 'A' and 'B' categories;
- Two favorable outlook revisions on one system and one stand-alone hospital, with both outlooks revised to positive from stable; and
- Two unfavorable outlook revisions, both on systems, with the outlooks revised to stable from positive.
Chart 1
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January 2025, U.S. not-for-profit health care rating actions | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
State | Rating | Outlook | Entity type | Action | Description | |||||||||
Catholic Medical Center | NH | BB+ | Developing | Stand-alone | Placed on developing outlook | Approved asset purchase agreement signed with for-profit Healthcare Corp. of America | ||||||||
CHRISTUS Health | TX | A | Stable | System | Downgrade | Weak unrestricted reserves relative to peers, further strained by growth plans | ||||||||
Cook Children's Medical Center | TX | AA | Stable | Stand-alone | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Deaconess Health System | IN | A+ | Positive | System | Favorable outlook revision | Trend of positive operations with balance sheet cushion and unrestricted reserves growth | ||||||||
Grand View Hospital | PA | B+ | Developing | Stand-alone | Placed on developing outlook | Signed definitive agreement to merge with St. Luke's University Health Network | ||||||||
H. Lee Moffitt Cancer Center & Research Institute | FL | A | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Hendrick Health | TX | A | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Henry Ford Health System | MI | A | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Henry Mayo Newhall Hospital | CA | BBB- | Positive | Stand-alone | Favorable outlook revision | Improved operating performance bolstered by strong DCOH, and unrestricted reserves | ||||||||
Lake Regional Health System | MO | BBB+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Lifescape | SD | A+ | Stable | Human service provider | Maintained | Credit quality consistent with existing rating | ||||||||
Marion Health | IN | A | Negative | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Marshfield Clinic | WI | BBB | CreditWatch Positive | System | Placed on CreditWatch positive | Potential rating impact related to its merger with the higher-rated Sanford Health | ||||||||
Montage Health | CA | AA- | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
National Jewish Health | CO | BB+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Norman Regional Hospital Authority | OK | B | Negative | Stand-alone | Downgrade | Significant decline in liquidity profile from unexpected increases in operating losses and transformation project cost overruns | ||||||||
Orlando Health | FL | A+ | Stable | System | Unfavorable outlook revision; New sale | Elevated integration risk and reduced liquidity and financial flexibility from recent sizable acquisitions | ||||||||
Palomar Health | CA | B | Negative | Stand-alone | Downgrade | Accelerating operating losses and rapidly deteriorating unrestricted reserves resulting in DSC and DCOH covenant violations | ||||||||
Phoebe Putney Memorial Hospital | GA | A+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
Scotland Memorial Hospital | NC | A | Stable | Stand-alone | Upgrade | Robust operations, exceptional MADS coverage, and favorable balance-sheet metrics aided by Health Access Stabilization Program | ||||||||
Scripps Health | CA | AA- | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
Self Regional Healthcare | SC | A+ | Stable | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
St Elizabeth Medical Center | KY | AA | Stable | System | Maintained | Credit quality consistent with existing rating | ||||||||
St. Luke's Health System* | ID | A | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Trinity Health | ND | BB- | Negative | Stand-alone | Maintained | Credit quality consistent with existing rating | ||||||||
UMass Memorial Health Care | MA | BBB+ | Stable | System | Maintained; New sale | Credit quality consistent with existing rating | ||||||||
Vandalia Health | WV | BBB+ | Stable | System | Unfavorable outlook revision | Balance sheet deterioration and less favorable operating performance reduced upside ratings potential over the outlook period | ||||||||
*This action relates to a new sale issuance for variable-rate demand bonds following a review completed in December. DSC--Debt service coverage. 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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