Moody's Investors Service affirmed the "Baa3" rating on Chicago-based Presence Health's issuer and revenue bonds, affecting $1 billion of debt.
Moody's said the system faces several challenges, including operating pressures, liquidity contraction in fiscal year 2016 and extensive delays in Medicaid funding from the State of Illinois. Moody's acknowledged Presence has made operational improvements and eliminated debt structure risks.
The outlook is negative, reflecting Moody's expectation that ongoing costs, catch-up on capital and delays in Medicaid reimbursements will create large liquidity constraints for Presence.
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