Moody’s Investors Service placed $193 million of debt sold for the Baptist Health System of East Tennessee on its watch list with an “uncertain direction.” It rates the system Ba2.
The bonds were issued by the Knox County Health, Educational, and Housing Facilities Board.
Moody’s said there are pressures on the rating due to Baptist’s deteriorating financial performance and position. However, analysts did note some positive factors, including the system’s recent merger with Catholic Healthcare Partners, as well as the anticipated redemption of its Series 1996 bonds in March.
Moody’s said operating performance continued to decline in the first four months of fiscal 2008, resulting in an operating loss of $15.2 million. The cash-to-debt ratio remained weak at less than 15%.
