Fitch Ratings and Standard & Poor’s last week downgraded their long-term ratings on BRCH Corp. Obligated Group, an acute-care hospital with 400 licensed beds in Boca Raton.
Both rating agencies downgraded to BBB-minus from BBB-plus their ratings on BRCH’s $93.4 million of outstanding Series 2001 bonds and $28.3 million of Series 1999A bonds. Another $19 million of taxable variable-rate demand bonds, Series 1999, were not rated by Fitch. Both rating agencies also placed a negative outlook on the debt.
The downgrades reflect BRCH’s continuing operating losses and pressures, and declining patient service volumes, analysts said.
“Factors that continue to support the investment-grade rating include BRCH’s liquidity position that is sound for the rating level, despite the significant declines in cash, and the hospital’s historically strong-although-not-dominant market presence in the competitive south Palm Beach County market,” a statement by Standard & Poor’s analyst Stephen Infranco said.
“Successful implementation to date of a cardiac surgery program that has met budgeted projections, and historically positive fundraising support from the hospital’s service area, Boca Raton, Fla., are additional credit strengths,” Infranco added.
Fitch downgraded its rating on Jan. 14 to BBB-plus from A-minus after BRCH reported a $41.6 million loss in its fiscal 2007 audit.
