The impact on hospitals of a potential downgrade of municipal bond insurers by Moodys Investors Service is unclear.
In light of deteriorating conditions in the U.S. mortgage market, Moodys last week outlined the approach it is taking on assessing the influence on the ratings of bond insurers. The ratings agency said it identified five insurers who are at risk of being most exposed to deteriorating performance of residential mortgage-backed securities, including Ambac Financial Group and MBIA.
Moodys said four of the bond insurers are somewhat likely to have a shortfall in capital that threatens their essential AAA rating, but MBIA is at greater risk of exhibiting a capital shortfall than previously communicated.
Moodys is closely monitoring the situation. It would be premature to speculate on any general effect on the outlook for not-for-profit hospitals of possible ratings actions regarding financial guarantors, said Lisa Goldstein, team leader of the healthcare ratings group for Moodys in New York, in a written statement.
The full analyses and decisions on whether to take rating actions will be completed within two weeks, Moodys said.