Moody's Investors Service said it has downgraded to Ba1 from Baa3 the long-term bond rating assigned to Lewistown Hospital, Pa.'s $20.6 million of outstanding bonds issued by the Mifflin County Hospital Authority.
The outlook remains negative.
The rating downgrade to Ba1 and the continued negative rating outlook is based on operating losses, large volume declines, and flat revenues in fiscal year (FY) 2012; trends which continue unabated through first quarter of FY 2013.
The challenges are partially offset by Lewistown Hospital's leading (though declining) market position, adequate unrestricted cash position and maintenance of adequate debt coverage measures. However, failure to improve performance and weakening of debt service coverage measures could further pressure the rating.