At the same time, Fitch assigned its “BB+” issuer default rating to LMC.
The downgrade and assignment are based on the health system’s weak net leverage, which is a result of the medical center’s $1.1 billion net pension liability. Under Fitch’s updated rating criteria, the credit agency includes operating leases and net pension liabilities as debt equivalents.
Fitch favorably viewed LMC’s consistent revenue growth and strong profitability before taking its pension liability into account.
The outlook is stable.
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