The rating refers both to the system’s long-term rating and on specific bonds. Other bonds were also downgraded to “AA” from “AA+.”
While Fairview management has introduced a number of expense management and revenue growth initiatives that S&P described as showing a “clear and robust turnaround strategy,” operating losses are expected to persist with a breakeven target likely to be a “multiyear process.”
“Fairview’s weaker operating performance began prior to the pandemic, and persisted through Sept. 30, 2022, as the system continued to grapple with industry wide headwinds, including rising labor and wage pressures and higher supply costs, which hampered operating performance,” S&P said.
Fairview, which announced plans to merge with Sioux Falls, S.D.-based Sanford Health Nov. 15, reported a net operating loss of $248.5 million for the nine months ending Sept. 30.
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