“The downgrade reflects our view of Presence Health’s significantly higher unaudited operating losses in fiscal 2015 (following a few years of ongoing operating losses), coupled with a weakened balance sheet, as well as an expected technical covenant violation related to debt service coverage for fiscal 2015,” said S&P credit analyst Suzie Desai.
S&P also placed Presence’s ratings on CreditWatch with negative implications. In addition, S&P lowered its long-term rating on Presence’s series 2009, 2009A and 2010A fixed rate revenue bonds and its underlying rating on Presence’s series 1999A and 1999B fixed rate revenue bonds.
In mid-March, Presence Health posted an operating loss of $186 million in 2015, which CEO Michael Englehart mostly attributed to an inadequate collections system.
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