Fitch Ratings downgraded Baltimore-based University of Maryland Medical System's outstanding bonds to "A-" from "A."
In addition, Fitch assigned its "A-" rating to UMMS' proposed $130.7 million series 2017D and $44.2 million series 2017E.
The downgrade is a result of several factors, including UMMS' increased leverage, sizable capital needs, elevated debt burden and amplified margin pressure. Fitch also acknowledged the medical system's elevated risk associated with executing its recent affiliation with Dimensions Health Corp., a Maryland system serving Prince George's County. Offsetting these factors are the health system's growing regional footprint and strong relationship with the University's school of Medicine.
The bonds were kept on Rating Watch Negative, reflecting UMMS' heightened risk under Fitch's proposed changes to nonprofit hospital's rating criteria.