Portland, Ore.-based Legacy Health has been downgraded from "A" to "A-" as the health system deals with sustained operating losses resulting in fewer days' cash on hand, S&P Global said Nov. 1.
A strong enterprise profile and a planned merger with Portland-based Oregon Health & Science University continues to help shore up the overall rating, S&P Global stressed.
"The rating further reflects our view of Legacy's pressured operations, with significant operating losses in fiscal 2023 driving a notable decline in DCOH," according to the note.
Such days' cash on hand numbers are expected to improve over the next year to approximately 200, S&P said. That number was 172 as of Sept. 30 with an $11.9 million operating loss reported for the quarter ending Sept. 30.
Legacy Health and OHSU have signed a letter of intent to merge operations, with a definitive agreement expected later in fiscal 2024, S&P said.