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Blog: A 'not unexpected' downgrade for West Penn Allegheny

Fitch Ratings lowered its already low rating for West Penn Allegheny Health System to CCC from B+, a multi-notch drop, as the chance of debt restricting grows and an acquisition by Highmark looks less certain.

The news came as the financially strapped health system and Highmark, a Pittsburgh insurer, went before a Pennsylvania judge for a hearing on West Penn Allegheny's recent bid to back out of its acquisition by Highmark in order to search for another buyer. The system announced the deal was off in late September and Highmark quickly sued to stop West Penn Allegheny from talking to new suitors.“The hospital's recent notice to Highmark terminating the affiliation agreement and its stated intention to pursue other affiliation opportunities at best signal an elevated and material possibility that the Highmark affiliation will not close by the April 30, 2013 implementation deadline, leaving WPAHS with limited options for addressing its precarious financial situation,” said Fitch analysts announcing the downgrade.

You can follow Melanie Evans on Twitter: @MHmevans.
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