Fitch Ratings downgraded Cleveland-based MetroHealth's series 2009B and series 2017 revenue bonds to "BB" from "BBB-," affecting more than $1 billion of debt.
At the same time, Fitch assigned its "BB" issuer default rating to MetroHealth.
The downgrade and assignment are based on several factors, including the health system's weak adjusted capital ratios, heavy debt burden, highly competitive service area and status as a safety-net provider. Fitch favorably viewed MetroHealth's sound operating margins, which are expected to strengthen its financial profile in the upcoming years.
The outlook is stable at the lower rating.