Phoenix Children's Hospital was dealt a multinotch downgrade and placed on watch for another possible drop by Moody's Investors Service, which cited weak liquidity and greater-than-expected losses in 2002. In February, the 208-bed hospital missed a deposit to a debt service reserve fund, violating bond covenants, Moody's said. The downgrade to Ba2 from Baa2 affects $83 million in debt. According to unaudited results provided to Modern Healthcare's Daily Dose, the hospital lost $44 million on operations in fiscal 2002 on revenue of $139 million. Losses were attributed to cost overruns to open a new facility and a flood that closed operating rooms, Moody's said. The hospital also lost its CFO in December 2002 and in February announced the end of affiliation talks with Banner Health System, Phoenix. Moody's said the hospital has rehired a turnaround consultant. -- by Mary Chris Jaklevic
Phoenix children's hospital downgraded amid losses
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