5 recent hospital credit rating downgrades

The following five hospital and health system credit rating downgrades occurred in the past four months. They are listed in alphabetical order. 

1. Hospital Sisters Health System (Springfield, Ill.) — from "AA-" to "A+" (Fitch Ratings)
"The downgrade reflects that HSHS has faced considerable operating pressures in the last two years, including the coronavirus pandemic and associated economic recession," Fitch said.

2. Marion (Ind.) General Hospital — from "A+" to "A" (S&P Global Ratings)
"The lower rating reflects our view of MGH's balance sheet deterioration following the issuance of the series 2020 bonds, including worsened maximum annual debt service coverage, debt burden, leverage, and unrestricted reserves to long-term debt," said S&P Global Ratings credit analyst Chloe Pickett.

3. NYC Health + Hospitals — from "AA-" to "A+" (Fitch Ratings) 
"The downgrade of the NYCHCC bonds is tied to the downgrade of the city's IDR to 'AA-' from 'AA', and reflects Fitch's expectation that the impact of the coronavirus and related containment measures will have a longer-lasting impact on New York's economic growth than most other parts of the country," Fitch said. 

4. The Methodist Hospitals (Gary, Ind.) — from "BBB" to "BBB-" (Fitch Ratings)
"The downgrade to 'BBB-' is based on continued operating constraints after significant losses in 2017 through 2019. Interim nine-month fiscal 2020 operating income results, despite the pandemic, reflect an early stabilization trend but at weaker levels that are more consistent with the prior three years," Fitch said.

5. Tower Health (West Reading, Pa.) — from "BBB+" to "BB+ (S&P Global Ratings); from "BBB" to "BB+" (Fitch Ratings)
"The three-notch downgrade reflects the significant deterioration in Tower Health's financial profile in the fiscal year ended June 30, 2020, including a severe loss from operations and negative cash flow resulting in inadequate debt service coverage ratios," said S&P Global Ratings credit analyst Kenneth Gacka.

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