Fitch places Centegra Health System on rating watch negative

Fitch Ratings placed its “BBB-” issuer default rating on Crystal Lake, Ill.-based Centegra Health System on rating watch negative pending the acquisition by Chicago-based Northwestern Memorial HealthCare.

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Concurrently, Fitch placed Centegra’s $134.7 million series 2014A and $190 million series 2012 on rating watch negative.

The rating watch negative placement reflects Fitch’s expectation that the rating will be downgraded if Centegra is not acquired by NMH as planned. The two parties are expected to sign a definitive agreement in May. 

On its own, Centegra’s weak operating profitability and significantly pressured leverage metrics would suggest a multi-notch downgrade.

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