The credit rating agency lowered its long-term rating to “BB+” from “BBB+.” The rating outlook remains negative. The downgrade affects about $1.3 billion of long-term debt.
“The three-notch downgrade reflects the significant deterioration in Tower Health’s financial profile in the fiscal year ended June 30, 2020, including a severe loss from operations and negative cash flow resulting in inadequate debt service coverage ratios,” said S&P Global Ratings credit analyst Kenneth Gacka.
S&P said that Tower Health’s losses were a result of operating issues that were exacerbated by the pandemic.
Tower Health also said in an Oct. 28 disclosure form that it plans to engage a restructuring consultant in early November.
The negative outlook reflects S&P’s expectation that Tower Health will continue to see operating losses in fiscal year 2021.
More articles on healthcare finance:
New Hampshire health system files for bankruptcy
6 recent donations to hospitals, health systems
CHS records $112M profit, says it will sell 4 more hospitals by year-end
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
