Troubled Missouri health system takes on consultants as debt covenant missed

Marshall, Mo.-based John Fitzgibbon Memorial Hospital, which in June was downgraded to a "CCC" rating, is working with a number of consulting firms after its debt service coverage ratio slipped below 1.00 for the fiscal year ended April 30.

The system's required ratio is 1.25 but it received a waiver of the ratio default Aug. 30 from the owner of $5.4 million in bonds. Fitzgibbon said in a Sept. 1 filing it is current on all debt service payments and that it does not anticipate missing any future payments.

The health system, which operates a 60-bed hospital about 80 miles east of Kansas City, as well as a 99-bed skilled nursing facility and several rural clinics, had only 32 days of cash on hand on record when Fitch Ratings made the two-notch downgrade June 22.

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