Albert Einstein Healthcare Network, Pa., Outlook to negative by Moody's

Moody's Investors Service said it has affirmed the Baa2 rating on Albert Einstein Healthcare Network, Pa.'s, (AEHN) bonds.

AEHN's issuer rating of Baa2 has been affirmed as well. The rating outlook is revised to negative from stable.

The outlook revision to negative reflects the system's continued weak margins and two-year budget shortfalls as well as larger than expected decline in unrestricted investments, which reduces balance sheet cushion during a period of operating stress.

The system reported a significant decline in volumes and budget shortfall in fiscal year 2014, including at the new Einstein Medical Center Montgomery (EMCM) where volumes increased year over year but were below budget, and performance would have been worse in the absence of a large temporary decline in pension expense.

The rating agency expects operating challenges will continue from volume declines, higher pension expense and the completion of an electronic medical record installation, which is being completed in the last physician company in fiscal year 2015.

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