Fitch Ratings downgraded to BBB-plus from A-minus roughly $219 million of revenue bonds issued on behalf of the Nebraska Methodist Health System.
The system operates a 430-bed hospital in Omaha, a 236-bed hospital in Council Bluffs, Iowa, and a new 116-bed women’s hospital in west Omaha.
The downgrade is mostly due to higher-than-expected costs related to the new women’s hospital and weak patient volume across the system, Fitch said in a report on the downgrade.
“The downgrade is further supported by planned capital expenditures, which Fitch expects will constrain liquidity growth and further stress liquidity metrics over the near term,” analysts wrote.
The system had total operating revenue of $584 million in 2009.
Most of the debt was issued by the Douglas County Hospital Authorities No. 2 and 3. The Iowa Finance Authority issued $8.4 million of bonds on behalf of the hospital in 1997.
