The long-term rating affirmation is in line with S&P’s definition of a “CCC”-rated organization, which suggest that without unforeseen positive development in the health system’s liquidity or a redemption offer, the hospital will default on its debt repayment.
“The negative outlook reflects the likelihood of the district filing for bankruptcy in the interim period, as well as the potential risk of unfavorable treatment of the bonds in bankruptcy court,” said S&P credit analyst Melanie Her.
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