Moody’s downgraded the 25-bed critical access hospital from Baa2 to B1 and said the outlook remains negative.
“The downgrade to B1 on the issuer rating reflects the significant weakening of the district’s operating margin and liquidity, in addition to the need for consecutive cash flow notes to fund operations,” Moody’s said in the rationale statement. “The district’s tax base is volatile and concentrated in the oil and gas industry, which has contributed to the challenged financial position as management has demonstrated an unwillingness to increase property tax rates sufficient to offset tax base declines and expenditure increases.”
Seminole Hospital District has around $38.6 million debt outstanding. A recent error that resulted in a delayed debt service payment also created uncertainty around the hospital district’s ability to make payments next year.
The hospital is also undergoing leadership changes that are affecting its rating, the statement said.
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