Concurrently, Moody’s affirmed its “A3” rating on St. Luke’s outstanding debt, affecting about $900 million.
The assignment and affirmation are based on several factors, including the health system’s strong market presence, growing footprint and healthy patient volume trends. Moody’s unfavorably viewed St. Luke’s weak liquidity, high leverage and recent margin compression as it transitions to risk-based reimbursement contracts.
The outlook remains negative, reflecting Moody’s expectation that St. Luke’s increasing exposure to risk-based contracts will put more pressure on operating margins.
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