The downgrade is a result of the medical center’s operating losses in fiscal year 2017, coupled with a deteriorating market share and high management turnover.
S&P acknowledged the medical center’s strong balance sheet and healthy debt profile.
The outlook is negative.
“The negative outlook reflects our expectations that operations will continue to be pressured through fiscal 2019 despite break-even budget expectations and the potential for a rate covenant violation as it relates to SGMC’s privately held debt,” S&P analyst Melanie Her said.
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