Summary: Providence St. Joseph Health, Washington; Hospital; System

S&P Global Ratings placed its 'AA-' long-term rating on debt issued by various issuers for Providence St. Joseph Health (Providence or PSJH), Wash., on CreditWatch with negative implications. The CreditWatch placement reflects the recently announced separation of Hoag from Providence at the end of January 2022. While full details are not yet available, and while Hoag Health is a much smaller entity than Providence, we believe that the separation will put some financial strain on Providence, which already has a lighter overall financial profile relative to the rating, primarily given that Hoag will leave the system with sizable unrestricted reserves. More specifically, per the fiscal 2021 nine-month interim ended Sept. 30, Hoag Health accounted for about 6% of system operating

...S&P Global Ratings placed its '##-' long-term rating on debt issued by various issuers for Providence St. Joseph Health (Providence or PSJH), Wash., on CreditWatch with negative implications. The CreditWatch placement reflects the recently announced separation of Hoag from Providence at the end of January 2022. While full details are not yet available, and while Hoag Health is a much smaller entity than Providence, we believe that the separation will put some financial strain on Providence, which already has a lighter overall financial profile relative to the rating, primarily given that Hoag will leave the system with sizable unrestricted reserves. More specifically, per the fiscal 2021 nine-month interim ended Sept. 30, Hoag Health accounted for about 6% of system operating revenue (which equals about $1.5 billion of 2020 annual operating revenue) and 17% of unrestricted cash and investments, net of Hoag's debt. In addition, the data show some deterioration in operating performance since...

Summary