PHOENIX – Providence Health & Services took a one-notch downgrade from Fitch Ratings Tuesday.

The downgrade, to AA-minus from AA, affects approximately $3.8 billion of revenue bonds issued by Providence Health & Services or issued on behalf of the healthcare organization by various authorities.
Fitch affirmed the AA-minus rating on approximately $1.9 billion of revenue bonds issued by St. Joseph Health System or issued on behalf of SJHS by various authorities.

Fitch announced the actions Tuesday ahead of a planned sale of $803 million of revenue bonds to be issued by the California Health Facilities Financing Authority on behalf of Providence St. Joseph Health.

Those bonds are expected to price in negotiated sales in two series the week of Aug. 22 and Sept. 5, respectively. PSJH, headquartered in Renton, Wash., became the sole member of PH&S and SJHS on July 1. 2016. The merger that made it the sole member won approval in June, and S&P Global Ratings said at that time it would likely not result in a downgrade from that agency.

PSJH operates 50 hospitals, 23 long term care facilities, 829 clinics, and 14 senior housing facilities in Alaska, Washington, Oregon, Montana, California, New Mexico and Texas.  After the new issuances, PSJH will have approximately $7.05 billion of total debt outstanding, including approximately $6.4 billion of bonds.

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