Moody's Investors Service upgraded as many not-for-profit hospitals and health systems as it downgraded during the first three months of the year, but that trend is not expected to last, according to the rating agency. Moody'sraised the outlook for eight borrowers last quarter and lowered the credit outlook for five, the report said. “Despite the increase in positive outlooks relative to negative outlooks, we still believe downgrades will continue to outpace upgrades,” analysts said.
More not-for-profit downgrades ahead: Moody's
Moody's upgraded 11 not-for-profits with a combined $2.75 billion in debt. Those hospitals and health systems owed improved credit to an improved local economy, consolidation or provider tax programs that boost government healthcare payments, Moody's said. The 11 downgraded organizations, which had a combined $1.44 billion of debt, struggled in communities “hit hardest by the recession,” Moody's said.
Moody's ended last quarter with four not-for-profit healthcare borrowers under review for a downgrade; one was under consideration for a credit raise. Analysts said they expect to see continued pressure on revenue from the economy and state and federal budget stress.
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