S&P downgrades Parkland to 'AA' after dedication of new hospital

S&P downgraded Dallas-based Parkland Health and Hospital System's long-term rating to "AA" from "AA+" March 31, just one day after the system dedicated its new 862-bed hospital.

Jennifer Garza, S&P's credit analyst, said, the rating downgrade was based on the system's "weaker liquidity position and lack of a well-defined plan to achieve healthier operating margins."

The lowered rating was also based on the system's moderately high overall net debt burden.

S&P considered Parkland's strengths for the credit rating action as well, including its good wealth and income levels.

The system's outlook is stable, which is based on "the stability of the underlying healthcare assessment; the longer-term stability of the management team, with all interim positions filled with full-time, permanent hires within the past 12 months; and our expectation that management will achieve structurally balanced operations over the long term," according to S&P.

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