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.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
