Fresno, Calif.-based Community Health System saw ratings on a series of its bonds downgraded amid sustained financial struggles, S&P Global said March 3.
While Community Health System has a leading position in the Central Valley, serving approximately 830,000 patients with a 54.5 percent market share, its recent operating losses and weaker balance sheet metrics do not conform with a higher rating, S&P said, as it reduced the ratings from "A-" to "BBB+." The outlook Is negative.
"The negative outlook is based on our view that performance could continue to be pressured, excluding one-time revenue impacts, and our view that reserves and debt-related metrics, which are already weak for the rating, may not improve to levels consistent with the current rating," S&P said.
Community Health System, which operates three acute care hospitals (1,026 beds) as well as other clinical services and a small insurance arm, named Chip Neuman, formerly the group's senior vice president of operations, as the new CFO in January. This change came after both the CEO and CFO left Community Health System in 2020, but such executive turnover was not necessarily of concern, the agency said.
The system faces additional challenges as it helps to absorb patients from the recently shuttered Madera Community Hospital.