Standard & Poor's Ratings Services said it lowered its long-term and underlying rating to BB-minus from BB-plus on Good Shepherd Medical Center, Texas' existing debt, issued by various entities.
The ratings remain on CreditWatch with negative implications.
"The lowered rating reflects our view of Good Shepherd's inability to complete its planned asset sales by Oct. 15, coupled with our view of the system's materially constrained financial metrics and debt service coverage that has been weakened by deeper operating and excess losses than budgeted," said Standard & Poor's credit analyst Karl Propst. "The CreditWatch designation reflects our view of the Oct. 15, 2014 amended and restated forbearance agreements with Wells Fargo Municipal Capital Strategies LLC and JPMorgan Chase Bank N.A.," Propst added.
Good Shepherd Health System (GSHS) is the sole member of Good Shepherd Medical Center (GSMC), Good Shepherd Medical Center Marshall (GSMC-M), and Good Shepherd Medical Center-Linden, which had no rated debt and which ceased operations on April 30 due to persistent operating losses. GSHS, GSMC, and GSMC-M are joint obligors to the outstanding bonds and form the obligated group. GSMC-Linden was not part of the obligated group, nor is GSHS Customer Service Building.
