Palomar Health, CA Various Bond Ratings Lowered To 'B' From 'BB+' On Covenant Violations, Operating Losses

ENGLEWOOD (S&P Global Ratings) Jan. 30, 2025--S&P Global Ratings lowered its ratings to 'B' from 'BB+' on the California Municipal Finance Authority's outstanding general obligation (GO) bonds, revenue bonds, and certificates of participation (COPs) issued for Palomar Health (Palomar). At the same time, S&P Global Ratings removed the ratings from CreditWatch, where they were placed with negative implications on Nov. 27, 2024. The outlook is negative. "The four-notch downgrade reflects Palomar's accelerating operating losses and rapidly deteriorating unrestricted reserves that resulted in covenant requirement violations for debt service coverage and days' cash on hand," said S&P Global Ratings credit analyst Chloe Pickett. "While management has signed a one-year forbearance agreement to avoid an event of default and acceleration, we believe

...January 30, 2025 ENGLEWOOD (S&P Global Ratings) Jan. 30, 2025--S&P Global Ratings lowered its ratings to 'B' from '##+' on the California Municipal Finance Authority's outstanding general obligation (GO) bonds, revenue bonds, and certificates of participation (COPs) issued for Palomar Health (Palomar). At the same time, S&P Global Ratings removed the ratings from CreditWatch, where they were placed with negative implications on Nov. 27, 2024. The outlook is negative. "The four-notch downgrade reflects Palomar's accelerating operating losses and rapidly deteriorating unrestricted reserves that resulted in covenant requirement violations for debt service coverage and days' cash on hand," said S&P Global Ratings credit analyst Chloe Pickett. "While management has signed a one-year forbearance agreement to avoid an event of default and acceleration, we believe its financial profile is likely to remain pressured during the outlook period," Ms. Pickett added. The obligated group's revenue secures...

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