Fitch Ratings last week dropped the Citrus County Hospital Board, Fla.’s bonds, issued on behalf of Citrus Memorial Health Foundation Inc., to BB-minus from BB-plus. The downgrade affects $39.4 million of outstanding debt.
Fitch revised the rating outlook to evolving from negative, and said the downgrade reflected continued operating losses at Citrus Memorial Hospital as well as a “steep liquidity decline” due to an ongoing legal dispute over the control of the hospital, problems with a new billing system, and increasing outpatient competition.
The private, nonprofit foundation runs the 198-bed hospital about 75 miles north of Tampa. The foundation has a long-term lease with the hospital board, which levies property taxes for CMH. The two have been locked in a legal battle over operations and funding for several years, with the board withholding millions in tax collections.
In March, Moody’s Investors Service downgraded its rating on CMH debt to Ba3 from Ba2, retaining a negative outlook