Holy Redeemer Health System, PA Bond Rating Lowered Two Notches To 'B+' On Operating Losses; Outlook Negative

CHICAGO (S&P Global Ratings) July 16, 2024--S&P Global Ratings lowered its long-term rating to 'B+' from 'BB' on Montgomery County Higher Education&Health Authority, Pa.'s revenue bonds, issued for Holy Redeemer Health System (d/b/a Redeemer Health [RH]). The outlook is negative. "The two-notch downgrade reflects RH's multiyear trend of operating losses that are significantly above budget and a concurrent deterioration of balance sheet-related metrics to levels that we consider to be in line with those of 'B+' rated stand-alone hospital-based health systems," said S&P Global Ratings credit analyst Marc Arcas. The downgrade also reflects our expectation that RH will not meet its master trust indenture (MTI) covenant requirement of 1.1x debt service coverage (DSC) for the obligated group in

...July 16, 2024 CHICAGO (S&P Global Ratings) July 16, 2024--S&P Global Ratings lowered its long-term rating to 'B+' from '##' on Montgomery County Higher Education & Health Authority, Pa.'s revenue bonds, issued for Holy Redeemer Health System (d/b/a Redeemer Health [RH]). The outlook is negative. "The two-notch downgrade reflects RH's multiyear trend of operating losses that are significantly above budget and a concurrent deterioration of balance sheet-related metrics to levels that we consider to be in line with those of 'B+' rated stand-alone hospital-based health systems," said S&P Global Ratings credit analyst Marc Arcas. The downgrade also reflects our expectation that RH will not meet its master trust indenture (MTI) covenant requirement of 1.1x debt service coverage (DSC) for the obligated group in fiscal 2024, which will require a consultant call-in. Securing the bonds is a gross receipts pledge from the obligated group and a mortgage on Holy Redeemer Hospital. The obligated group...

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