West Reading, Pa.-based Tower Health was downgraded from "CCC+" to "CCC" amid ongoing financial losses, Fitch Ratings said Sept. 19.
Although "a measure of improvement" was seen in the final three months of its fiscal year ended June 30, operating results continue to struggle even as the three-hospital system enacted strategic initiatives such as the sale of Chestnut Hill Hospital in Philadelphia, Fitch said.
"Tower's pathway to demonstrated financial stability still remains challenged, with additional operational improvement needed to overcome their current trajectory of liquidity losses," Fitch said.
Tower Health, which had 39.3 days' cash on hand as of June 30, also had approximately $1.6 billion of total debt outstanding. Operating losses for the fiscal year totaled $137 million on $1.9 billion of revenue.
The downgrades apply both to Tower Health's default rating and those on a series of bonds.