Brawley, Calif.-based Pioneers Memorial Healthcare District was downgraded three notches to "B" amid ongoing operational challenges that have resulted in its number of days of cash on hand potentially going as low as 15, Fitch Ratings said Dec. 15.
The healthcare group, which operates a 107-bed acute care hospital and several outpatient physician, primary and specialty clinics throughout Imperial County approximately 120 miles east of San Diego, also failed to meet its debt service coverage for fiscal year 2022. The "B" grade is for both its overall Issuer Default Rating and for bonds the healthcare system holds.
The operating problems at Pioneers Memorial are longstanding and have not been helped by the COVID-19 crisis, Fitch said.
"PMHD's operating profile assessment is very weak, driven by the district's history of slim operating margins which were further disrupted in recent years due to the COVID-19 pandemic," the report said.
The hospital group will also have to focus on future "significant" capital expenditure to upgrade its facilities because of seismic building requirements.
Pioneers Memorial total revenues for fiscal year 2022 were $135 million.