Standard & Poor’s downgraded its debt rating for Mount Sinai NYU Health, New York, to BBB- from BBB, a move that could cost the beleaguered health system millions of dollars in added debt expense. The downgrade triggers a clause in Mount Sinai NYU’s bond documents requiring the system to refinance $181 million of variable-rate debt to a fixed rate. With the downgrade, S&P raised its outlook for the system to stable from negative. S&P cited the system’s failure to meet financial expectations and continued weak liquidity levels. Another factor contributing to the downgrade was uncertainty over the impact of the temporary suspension of Mount Sinai’s liver transplant program, said Liz Sweeney, an S&P director. There also are concerns about a governance change last year that decentralized decisionmaking, Sweeney said. The system, formed from a 1998 merger, no longer negotiates managed-care contracts as one organization, Sweeney said. For 2001, Mount Sinai NYU lost $70 million on operations but earned $28 million on total revenue of $1.7 billion.
Downgrade could prove costly for Mount Sinai
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