S&P Global Ratings lowered the rating to "BBB-" from "BBB" on Marysville, Calif.-based Fremont-Rideout Health Group's series 2003A, 2011 and 2006A bonds.
"The rating action reflects the significant deterioration in FRHG's financial profile over the last two full fiscal years, with operating losses persisting through the first three months of fiscal 2017, driven in part by increased costs required to resolve regulatory compliance issues faced by the organization as well as by increased capital spending related to the construction of a new tower on FRHG's main campus," said S&P analyst Allison Bretz.
The outlook is stable.