Louisville, Ky.-based UofL Health saw its outlook revised to negative after nine-month financials ending March 31 revealed operating income slumping to $821,000, S&P Global said May 24. The rating agency affirmed its "A-" long-term rating on a series of bonds.
Concerns over the six-hospital system's debt coverage and its low days of cash on hand, consistently below 70, also led to the outlook revision, S&P said. Days of cash on hand were just 42.8 as of March 31.
"The negative outlook also reflects the deterioration in operating performance through March 2023, which was accompanied by a decline in MADS (maximum annual debt service) coverage to levels that are well below those of similarly rated systems," the note said.
UofL Health said it had $444 million of debt at the end of the current reporting period.
Its operating income for the fiscal year ending June 30, 2022, was $104.6 million, an operating margin of 4.78 percent versus a 0.05 percent figure for the period ending March 31 and a sign of "meaningful decline in operating performance," the ratings agency said.