S&P: West Penn Deal Weakens Highmark's Financial Profile

Standard & Poor's Ratings Services released a report yesterday, affirming the "A" long-term credit rating on Highmark but cutting the Pittsburgh-based health insurer's outlook to negative from stable due to concern of future operating performance.

Jon Reichert, an S&P credit analyst, said in a news release the decreased outlook signals the rating agency's expectation of weakened operating earnings. S&P expects Highmark's return on revenue to hover around 1.5 percent this year, lower than the 2 percent recorded in 2012.

S&P specifically cited Highmark's deal to acquire West Penn Allegheny Health System as a major financial barrier, saying the financially ailing health system "will continue to be a potential draw on Highmark's financial resources," according to the report.

More Articles on West Penn Allegheny Health System and Highmark:

Moody's to Scrutinize Highmark's Credit Following West Penn Debt Deal
West Penn-Highmark Transaction Costs to Surpass $1.6B
Highmark Asks Court to Order UPMC to Return Confidential Documents

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