Moody's Investors Service downgraded the ratings of Valhalla, N.Y.-based Westchester County Health Care Corp. and Charity Health System to "B1" from "Ba1."
The downgrade of WCHCC's rating reflects a material decline in liquidity to a "very weak level concurrent with growing near-term demands on cash, increasingly high reliance on short-term bank lines, and higher-than-expected cashflow losses," Moody's said in a June 20 report.
Moody's added that management turnover during significant financial stress contributes to high governance risk related to financial strategy and track record, "which is a key driver to this rating action."
The downgrade of CHS' rating is based on WCHCC's legal guarantee to pay debt service on CHS' bonds, according to the report.
"The ratings are under review for further downgrade as we assess the risk of additional liquidity and cashflow losses in the near term," Moody's said.