Standard & Poor’s on Monday downgraded Howard Young Medical Center Inc.’s rating to BBB from BBB-plus due to large operating losses in fiscal 2008 that prompted a debt service covenant violation.
The rating agency also attributed the downgrade to a slowdown in HYMC’s volume trends. The hospital issues its debt through the Wisconsin Health and Education Facilities Authority.
Analysts said they are concerned over the center’s sizable operating losses in the 2008 fiscal year and losses for the eight months ended May 30 as well as volume declines following the departure of five doctors who were part of Ministry Medical Group. Howard Young also faces ongoing competition from, and reliance on, Marshfield Clinic physicians and new competition from Aspirus’ ambulatory surgery center.
The credit is supported by a healthy balance sheet that serves as a cushion and gives the hospital flexibility to resolve operating issues and strong oversight from its parent, Ministry Health Care.
“The stable outlook demonstrates our recognition of the turnaround plan currently underway at HYMC and is also based on the maintenance of a sound balance sheet,” analyst Antionette Maxwell said. The 68-bed acute-care hospital is located in Woodruff, about 70 miles north of Wausau.