Marshfield (Wis.) Clinic Health System has amended some of its indebtedness agreements to "reflect financial difficulties," the system said in an April 21 filing.
Specifically, the 11-hospital system is having any debt service coverage ratio waived for fiscal 2022 and for the first quarter of 2023.
After that, such obligations will be reinstated to reflect a ratio of 1x, less than the existing 1.2x, Marshfield reported. By the end of September, the ratio will be restored to 1.2x.
"In anticipation of not achieving 1.2x debt service coverage for the fiscal year ended December 31, 2022 and for the fiscal quarter ended March 31, 2023, the obligated group and the banks executed amendments to all of the bank agreements," according to the filing.
In addition, Marshfield, which has laid off 346 workers and has had its credit rating downgraded in recent weeks, must secure its planned merger with Duluth, Minn.-based Essentia Health by Oct. 15 or will face further debt obligations.