Fitch Ratings stripped Bethesda Home and Retirement Center of its investment-grade rating, lowering the credit to BB-plus from BBB-minus due to its deteriorating balance sheet in 2008 and 2009. The action affects $2.6 million of bonds issued through the former Illinois Health Facilities Authority. The outlook was revised to stable from negative.
Bethesda has failed to achieve 1.1 times coverage of debt service due to its faltering operating profile. Its fiscal 2008 and 2009 results were driven by weaker occupancy, below budget Medicare census, and sizeable investment losses.