Duke University Health System, NC Bonds Rating Lowered To ?AA-? From ?AA? On Weaker Financial Profile

AUGUSTA (S&P Global Ratings) Dec. 8, 2023--S&P Global Ratings lowered its rating to 'AA-' from 'AA' on North Carolina Medical Care Commission's series 2016A and 2016D tax-exempt bonds, issued for Duke University Health System (DUHS), as well as on the series 2017 and 2020 taxable bonds issued directly by DUHS. At the same time, S&P Global Ratings affirmed its 'A-1+' short-term rating on DUHS' $500 million taxable commercial paper (CP) program backed by the system's self-liquidity. The outlook is stable. "The downgrade reflects the health system's weaker financial profile from an accelerated CP issuance that we expect will top out at $500 million and remain outstanding through 2028, dilution from the recent Private Diagnostic Clinic acquisition, and persistent operating losses,

...December 8, 2023 AUGUSTA (S&P Global Ratings) Dec. 8, 2023--S&P Global Ratings lowered its rating to '##-' from '##' on North Carolina Medical Care Commission's series 2016A and 2016D tax-exempt bonds, issued for Duke University Health System (DUHS), as well as on the series 2017 and 2020 taxable bonds issued directly by DUHS. At the same time, S&P Global Ratings affirmed its 'A-1+' short-term rating on DUHS' $500 million taxable commercial paper (CP) program backed by the system's self-liquidity. The outlook is stable. "The downgrade reflects the health system's weaker financial profile from an accelerated CP issuance that we expect will top out at $500 million and remain outstanding through 2028, dilution from the recent Private Diagnostic Clinic acquisition, and persistent operating losses, as calculated by S&P Global Ratings, that we expect will resume in 2025 after improving in 2024 largely due to one-time events," said S&P Global Ratings credit analyst Cynthia Keller. Securing the...

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