Fitch Ratings has downgraded the rating on $50.7 million in revenue bonds issued on behalf of 308-bed Lawrence & Memorial Hospital in New London, Conn., to "A," and revised the hospital's outlook from negative to stable.
The rating downgrade was driven by LMH's weakening profitability, which was partially due to a three-week labor strike in November and December 2013. The strike resulted in 200 discharges and $14.3 million in expenditures.
The hospital's operating margin was a negative 4.7 percent through the nine months ended June 30. LMH liquidity metrics remain sound, as the hospital had cash to debt of 182.3 percent on June 30. In addition, the hospital has a dominant market share in its primary service area.
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