Moody's Investors Service assigned its "A3" rating to West Reading, Pa.-based Tower Health's $50 million series 2017A revenue bonds.
Concurrently, Moody's affirmed its "A3" rating on Tower Health's outstanding debt, affecting approximately $940 million of debt.
The assignment and affirmation are a result of Tower Health's strong market position, historically stable operating performance and favorable absolute liquidity metrics. Moody's also acknowledged the risks associated with Tower Health's recent acquisition of five for-profit hospitals, which increased the health system's debt burden.
The outlook is negative, reflecting the execution risk of integrating the five formerly for-profit hospitals into the nonprofit culture of Tower Health.