Fitch Ratings is considering slashing its rating on Beebe Medical Center in Lewes, Del., after a former staff pediatrician at the hospital was indicted on charges of rape and sexual exploitation.
Earlier this year, a grand jury indicted Dr. Earl Bradley, charging him with molesting 103 children between 1998 and 2009, mostly girls.
Beebe Medical was named codefendant in at least two related civil suits, according to Fitch.
In putting the credit on negative watch, analysts cited the possibility of a monetary judgment that would not be covered by insurance as a potential drain on the medical center’s liquidity. Beebe has $87 million in unrestricted cash.
Fitch currently rates the 210-bed nonprofit hospital’s debt A-minus.
Beebe has $64.4 million of outstanding Fitch-rated debt that was issued through the Delaware Health Facilities Authority, including $17.4 million in variable-rate demand bonds supported by a letter of credit from PNC Bank.
Fitch does not rate $18.7 million in VRDBs issued in 2002, also backed by PNC.
“Fitch will monitor the progress of the civil actions and the ongoing investigation and adjust the rating as warranted,” the agency said in a release.
