Fitch has removed Meadowbrook, Pa.-based Holy Redeemer Health System from rating watch negative after it avoided violating its debt service covenant for a second consecutive year.
The health system was downgraded to “B+” from “BB-” by Fitch in June and was placed on rating watch negative over the possibility of another debt service covenant violation, which could trigger debt acceleration.
Holy Redeemer was not in compliance with its debt service requirements in fiscal 2024, and a consultant was brought in to assist with the development of an improvement plan. Fitch said in its Nov. 21 report that the system’s performance through the first quarter of 2026 — ended Sept. 30 — remains pressured but has improved year over year.
“Management continues to advance its operational turnaround plan, which has yielded significant savings to date,” Fitch said.
Holy Redeemer has a stable outlook after being removed from negative watch. Fitch said the system’s liquidity position provides some flexibility at its current B+ rating, and management’s turnaround effort should support stable-to-improving operating performance.
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