Moody’s downgrades Mercy Hospital’s rating to ‘Baa2’

Moody’s Investors Service has downgraded Iowa City, Iowa-based Mercy Hospital’s rating to “Baa2” from “A3,” affecting $76 million of outstanding debt.

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The downgrade is based on a number of factors, including a decline in fiscal year 2015 operating performance.

The hospital faces numerous challenges, including a competitive service area with a sizable academic medical center.

The outlook is stable, reflecting Moody’s expectation that Mercy will maintain its strong balance sheet position, giving it a cushion as management focuses on improving operations.

More hospital outlook and credit rating actions:
Moody’s revises Erlanger Health System’s outlook to positive
Moody’s downgrades Mission Hospital’s rating to ‘Ba2’
Moody’s affirms Stormont-Vail HealthCare’s ‘A2’ rating

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