Montgomery, Ala.-based Jackson Hospital & Clinic's financial situation worsened in early September when the 344-bed hospital defaulted on $60 million of municipal bonds and received a credit downgrade from S&P, according to Bloomberg.
The hospital failed to make a payment Sept. 3 after the bond trustee demanded full payment of all principal and interest in August. UMB Bank, the bond trustee, said Jackson hasn't made rent or lease payments for five months, according to the report.
Moody's Ratings and S&P Global downgraded the health system in recent months, with S&P issuing a "D" rating after the last missed payment. Jackson has not provided audited financial statements for the 2022 or 2023 years.
In June, Jackson's board approved an affiliation with private equity firm HumanityCorp, but UMB became the bond trustee in July. Like many hospitals, Jackson has been affected by soaring labor costs and inflation, according to the report.