Renton, Wash.-based Providence, which reported a fiscal 2022 operating loss of $1.7 billion, was downgraded as the 51-hospital system continues to deal with ongoing operational challenges, Fitch Ratings said March 17.
The downgrade to "A" from "A+" applies both to the system's default rating and on about $7.4 billion worth of debt.
While Providence is expected to recover its cash flow margins in the coming years, it will have to deal with sustained pressures that will require disciplined adherence to a number of cost-cutting initiatives the system has launched in its Recover and Renew program, Fitch said.
The outlook for Fitch is negative with Providence having higher-than-average debt loads and amid concern the system could fail to meet operational targets in fiscal 2023.
Providence has approximately $26.4 billion in annual revenues and employs 107,000 people.