NEW YORK - Moody's Investors Service said it has downgraded to Ba3 from Ba2 the long-term bond rating assigned to Citrus Memorial Hospital's (d.b.a. Citrus Memorial Health System) $39.4 million of outstanding bonds issued by the Citrus County Hospital Board, Fla. The outlook remains negative.
The downgrade to Ba3 from Ba2 and the maintenance of the negative outlook is driven by poor operating performance through the first four months of FY 2012 ending January 31, 2012 compared to the prior year comparable period; a material decline in liquidity following some practice acquisitions and unexpected challenges with a conversion of the patient billing system as well as the ongoing legal dispute regarding hospital governance.
The downgrade and negative outlook also reflect the upcoming test date for the liquidity covenants on the bank notes and the current level of days cash on hand which is below the covenant.