Moody's Investors Service said it downgrades East Jefferson General Hospital, La.'s bond rating to Ba2 from Ba1 on $161.6 million of outstanding bonds issued by the Jefferson Parish Hospital Service District No. 2.
The rating outlook remains negative.
The rating downgrade to Ba2 is based on EJGH's continued variable operating performance and operating losses over several years as well as failure to reach projected levels of performance for a third year in a row.
The downgrade also reflects the decline in absolute unrestricted cash and investments. Furthermore, the termination of the negotiations with a potential partner leaves EJGH as one of the only remaining standalone hospitals in the metro area.
EJGH's credit profile benefits from the hospital's leading market share its primary service area (PSA), a conservative investment allocation and all fixed rate debt, and future capital spending that can be supported from unspent bond funds, which should allow liquidity to stabilize.
