Standard & Poor's Ratings Services said it lowered its rating to B-plus from BB on Gerald Champion Regional Medical Center (GCRMC), N.M.'s $71 million series 2012A bonds, and at the same time placed the B-plus rating on CreditWatch with negative implications pending clarification of a possible covenant event of default and its potential implications.

"The rating change and CreditWatch designation reflect our view of GCMRC's worse-than-budgeted operating loss and its effect on debt service coverage," said Standard & Poor's credit analyst Karl Propst. "We understand that the loss was caused by declining patient volumes, increased bad debt and charity costs, and reimbursement reductions associated with the state's cut to Medicaid funding, as well as a reduction in sole community provider funds, a delay in receipt of those funds, and reimbursement reductions occurring under federal sequestration," continued Propst.

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