City of Hope rating downgraded amid debt and operating weakness

Duarte, Calif.-based City of Hope has been downgraded from "A+" to "A" as the health system struggles with declining operating performance and increased debt linked to its acquisition of Cancer Treatment Centers of America, S&P Global Ratings said Dec. 23.

The rating refers both to City of Hope's outstanding debt and to $600 million of bonds it holds. The overall outlook is negative.

CTCA had weak operating performance prior to the acquisition and this coincided with weaker operating performance for City of Hope amid COVID-19 pressures and higher labor costs, S&P analysts said.

"These challenges also coincide with a period of significant capital spending to broaden COH's footprint, and we believe that there is significant integration risk over the outlook period as management integrates CTCA," the report said.

Earlier this month, City of Hope reported annual losses totaling $705 million compared with a net gain of $787 million in 2021.

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