Renton, Wash.-based Providence, which has undergone three rating downgrades in recent weeks, has been issued with an "A" rating on $585 million of new debt, Fitch Ratings said April 14.
The new debt will go toward funding other existing debt, Fitch said, with management also considering a further issue of $300 million to refinance a loan from Wells Fargo.
Such moves come against the backdrop of very challenging expenses for the 51-hospital system.
"Revenue is largely not the challenge, but rather extreme dislocation of expenses, particularly labor, and specifically heightened labor shortages in Providence's markets in the West Coast/Pacific Northwest," Fitch said.
The system reported a $1.7 billion operating loss in 2022 on revenues totaling $26.4 billion.
While Providence's debt metrics are more in line with a "BBB" rating and are expected to stay so in the short-term at least, the system's wide-ranging revenue streams, its superior focus on data and innovation, and its robust market share will continue to bolster it through such challenging times, Fitch said.