Holy Redeemer Health System, PA, Revenue Bonds Downgraded To 'BBB' From 'BBB+' On Weakening Operating Performance

BOSTON (S&P Global Ratings) Feb. 1, 2018--S&P Global Ratings lowered its long-term rating on Montgomery County Higher Education&Health Authority, Pa.'s revenue bonds, issued for Holy Redeemer Health System (HRHS), to 'BBB' from 'BBB+'. The outlook is stable. The downgrade reflects weaker-than-expected operating performance in fiscal 2017 with continued deterioration through first-quarter fiscal 2018 (ended Sept. 30 2017). "This resulted in margins and coverage that are weak for the rating," said S&P Global Ratings credit analyst Kelsey Thomas. While we expect HRHS to continue to face operating challenges, we understand management has implemented a robust revenue enhancement and cost-saving plan as part of its mitigation strategy to achieve break-even results by 2019. However, we believe this could be challenging

...BOSTON (S&P Global Ratings) Feb. 1, 2018--S&P Global Ratings lowered its long-term rating on Montgomery County Higher Education & Health Authority, Pa.'s revenue bonds, issued for Holy Redeemer Health System (HRHS), to '###' from '###+'. The outlook is stable. The downgrade reflects weaker-than-expected operating performance in fiscal 2017 with continued deterioration through first-quarter fiscal 2018 (ended Sept. 30 2017). "This resulted in margins and coverage that are weak for the rating," said S&P Global Ratings credit analyst Kelsey Thomas. While we expect HRHS to continue to face operating challenges, we understand management has implemented a robust revenue enhancement and cost-saving plan as part of its mitigation strategy to achieve break-even results by 2019. However, we believe this could be challenging due to the current industry stress. Additional risks include a competitive operating environment, in which there has been a fair amount of consolidation over the past three years....

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