Fitch downgraded West Penn’s bonds to B+ from BB-, while Moody’s ratings for the health system went to Caa1 from B2.
Fitch officials said the rating downgrade reflects the “significant deterioration in operating performance in fiscal 2011,” which resulted in a negative 4.8 percent operating margin, according to the release. So far in 2012, West Penn has a negative 7 percent operating margin.
West Penn’s affiliation agreement with health insurer Highmark is considered to be a “positive development,” but if the deal fails to receive regulatory approval, there would be more downward pressure on the bond rating.
Related Articles on West Penn Allegheny Health System:
7 Hospitals Receive Credit Downgrades in Past Month
Moody’s Downgrades West Penn Allegheny’s Bond Rating to Caa1
Hearing Scheduled to Determine Whether to Unseal Highmark-West Penn Agreement
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