Moody's has downgraded Meadowbrook, Pa.-based Redeemer Health's rating to "B1" from "Ba2."
The downgrade reflects the system's ongoing operating cash flow losses and cash declines, as well as a likely breach of its fiscal 2024 debt service coverage covenant, Moody's said in an Oct. 15 report.
Moody's said elevated governance risk related to financial strategy and track record is a key driver to the downgrade.
Moody's said the "B1" rating is supported by Redeemer's stable market position and "still adequate, but declining liquidity levels," with 91 days of cash on hand. The ratings agency said a key challenge to reversing poor operating performance includes recruiting and retaining staff.
Redeemer's outlook remains negative with Moody's, according to the report.
In June, Fitch downgraded Redeemer's rating to "BB-" from "BB+" and said the downgrade reflected a "multi-year trend of sizable operating losses that has led to a steady decline in liquidity, thereby reducing the system's financial flexibility."