Moody's Investors Service downgraded South Miami-based Baptist Health South Florida to "A1" from "Aa3," affecting $1.3 billion of outstanding debt.
Concurrently, Moody's assigned its "A1" rating to BHSF's proposed $794 million series 2017 revenue bonds.
The downgrade is a result of BHSF's constrained operations despite efforts to mitigate the weakening operating trajectory. In addition, Moody's attributed the downgrade to the heath system's modest revenue growth, lower reimbursements and recent acquisition of Boynton Beach, Fla.-based Bethesda Healthcare System. Moody's also acknowledged BHSF's strong market position, large geographic footprint, solid liquidity metrics and limited debt structure risk.
The outlook remains negative, reflecting Moody's expectation that the health system will continue to see operating challenges in fiscal year 2018.