West Reading, Pa.-based Tower Health had its long-term rating downgraded two notches to "CCC+" from "B" amid "significant ongoing operating losses," S&P Global said Oct. 4.
It was the second downgrade in a matter of weeks for the three-hospital system after Fitch lowered its rating from "CCC+" to "CCC" Sept. 19.
"The downgrade reflects Tower Health's significant ongoing operating losses, albeit at a lower level, that are expected to continue in fiscal 2024, and a steep decline in unrestricted reserves to a level that we view as highly vulnerable," said S&P Global Ratings credit analyst Anne Cosgrove.
There could be a further downgrade for Tower Health given the system's negative outlook, S&P said, assessing a 1 in 3 chance of such a downgrade happening.