S&P downgrades West Penn Allegheny bonds
Standard & Poor’s Ratings Services lowered its rating to BB- from BB on $758 million of 2007 bonds issued for the West Penn Allegheny Health System, the rating agency announced on Friday. The outlook was stable.
“The downgrade reflects West Penn’s difficulties fully reaching targeted financial expectations set by both prior management at the time of the 2007 bond rating and those provided more recently by the current management team for fiscal 2010,” credit analyst Cynthia Keller Macdonald said in a prepared statement. The downgrade also reflects strategic changes at the system, which are likely to “put increased financial pressure” on the system for the next two to three years.
Despite the downgrade, Standard & Poor’s said management’s plan to integrate services within the system’s five acute care hospitals were “well thought out” and “likely to improve the organization’s long-term viability and readiness for health reform,” the agency said low fee payday advance. Despite “significant competition” from rival University of Pittsburgh Medical Center, West Penn Allegheny is an “essential component of the Pittsburgh market.”
On June 2, Moody’s downgraded West Penn’s bonds as well to B1 from Ba3. Earlier in that week, West Penn Allegheny reported an operating loss of $5.1 million and $11.5 million for the three- and nine-month periods ending March 31 respectively.
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