Moody's Investors Service has downgraded to Ba3 from Baa3 the rating assigned to Good Shepherd Medical Center, Texas's (GSMC) $93.7 million of outstanding bonds issued by the Gregg County Health Facilities Development Corporation and the Harrison County Health Facilities Development Corporation.
The rating remains under review for downgrade.
The rating downgrade reflects the severity of the liquidity risks GSHS faces related to the necessity of forbearance agreements to avoid debt acceleration; a material and rapid decline in financial performance through year-to-date fiscal year (FY) 2014, resulting in significant miss to budget; sizeable patient volume losses and related market share decline; and the expectation that the organization will not return to profitability until FY 2016.
