...S&P Global Ratings lowered its long-term rating to 'A+' from '##-' on Providence St. Joseph Health (PSJH), Wash.'s various taxable fixed-rate bonds and on various issuers' tax-exempt bonds issued for PSJH. The outlook is negative. The rating action reflects a weaker financial profile following the disaffiliation of Hoag (in Southern California) at the same time when margins remain pressured as a result of COVID-related challenges, resulting in a 2021 operating loss near $900 million (negative 3.3% margin, as calculated by S&P Global Ratings). In addition, PSJH's balance sheet, which was a stabilizer at a time when the system experienced operating volatility, is somewhat diminished as a result of the disaffiliation, and PSJH will also no longer benefit from Hoag's healthy cash flow. Although we recognize that some debt also left the system with Hoag, Hoag's departure results in less flexibility at a time that PSJH is trying to improve operations following two very challenging years of the...
