Geisinger Health System hit with rating downgrade

Moody’s Investors Service has downgraded Danville, Pa.-based Geisinger Health System’s outstanding bonds from “A1” to “A2.” 

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Five things to know: 

1. Geisinger’s outlook is stable, and it has about $1.3 billion of debt outstanding, according to Moody’s. 

2. The downgrade reflects expectations that Geisinger’s will lead to weak operating cash flow for a protracted period. 

3. The “A2” rating reflects expectations that Geisinger will continue to benefit from its clinical footprint of tertiary and quaternary services and leading market capture across central and northeastern Pennsylvania. Moody’s said this will be supported by strong brand recognition and system growth initiatives. 

4. Factors that could lead to a rating upgrade include stronger and sustained operating cash flow margins and strengthening of balance sheet metrics. 

5. Failure to improve operating performance to targeted levels could result in further rating downgrades.

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