Fitch Ratings downgraded West Reading, Pa.-based Tower Health's revenue bond rating to "BBB" from "A."
Fitch said the three-notch downgrade resulted from the challenges Tower Health has faced in integrating five acute care hospitals it acquired from Franklin, Tenn.-based Community Health Systems in 2017.
"After allowing for two full years of integration, this past year's writedown of $86 million in accounts receivable, along with other operational challenges at the [acquired] hospitals, has placed Tower's current operations and balance sheet in a more precarious position than what was first anticipated when the transaction occurred," Fitch said.
Fitch said that the transaction weakened Tower's financial position, and its operational improvements have not materialized.
The hospitals that Tower Health acquired from CHS in 2017 are: Brandywine Hospital in Coatesville, Pa; Chestnut Hill Hospital in Philadelphia; Jennersville Regional Hospital in West Grove, Pa.; Phoenixville (Pa.) Hospital; and Pottstown (Pa.) Memorial Medical Center.
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