Moody’s also affirmed the “Ba2” rating assigned to debt issued by Saint Vincent Hospital, doing business as Saint Vincent Health Center, the primary operating entity of Saint Vincent Health System in Erie. The rating action affects approximately $87 million of rated debt.
The outlook revision reflects Moody’s expectation that operations and balance sheet resources will at least remain consistent with 2014 levels based on evidence that SVHS’s affiliation with Pittsburgh-based Highmark has provided some financial resiliency.
The rating affirmation was based on a number of factors, including SVHS’s markedly better, but still thin, operating performance, and SVHS’s affiliation with Highmark.
The hospital also faces some challenges, which were considered for the rating affirmation, such as facing intense competition in its service area, debt structure risks, a large unfunded pension liability and weak socio economics of the greater service area, according to Moody’s.
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