The following five hospital and health system credit rating downgrades occurred since March 1. They are listed in alphabetical order.
1. Catholic Medical Center (Manchester, N.H.) — from "Baa2" to "Baa3" (Moody's Investors Service)
"The downgrade to Baa3 reflects the continuation of Catholic Medical Center's multi-year trend of modest operating performance which was exacerbated by pandemic related revenue declines that resulted in large operating losses in fiscal 2020," Moody's said.
2. Mercy Hospital (Iowa City, Iowa) — from "Ba3" to "B1" (Moody's Investors Service)
"The downgrade to B1 reflects the near term challenges that Mercy will face following the large operating loss in fiscal 2020, narrow headroom to the debt service covenant in fiscal 2020 and the pronounced December COVID surge, creating headwinds to retire to historical levels of stronger financial performance," Moody's said.
3. Kuakini Health System (Honolulu) — from "B-" to "CCC" (S&P Global Ratings)
"The lower rating reflects Kuakini's rapid earnings and cash deterioration this past year, with unrestricted reserves falling to $9.9 million as of Dec. 31, 2020, or just 23 days' cash on hand, from $23.3 million as of June 30, 2020," said S&P Global Ratings credit analyst Patrick Zagar.
4. Summa Health (Akron, Ohio) — from "A-" to "BBB+" (Fitch Ratings)
"The downgrade to 'BBB+' from 'A-' reflects the material change in the leverage ratios, which are now more aligned with the lower rating category," Fitch said.
5. Tower Health (West Reading, Pa.) — from "BB+" to "BB-" (S&P Global Ratings); from "BB+" to "B+" (Fitch Ratings)
"The two-notch downgrade reflects our view of Tower Health's continued significant operating losses through the interim period ended Dec. 31, 2020, which have been higher than expected, coupled with recent resignations of members of the senior management team," said S&P Global Ratings credit analyst Anne Cosgrove.