Fitch Ratings downgraded $572 million in debt issued for Loma Linda University Medical Center one notch to BBB-minus, the lowest investment grade rating, based partly on a history of missed financial targets. The outlook was revised to stable from negative.

Citing weak liquidity and a high debt burden, Fitch analysts said Monday that the rating agency had held the rating at BBB for several years expecting the medical center would benefit from its strategic initiatives.

LLUMC, an 815-bed acute care teaching hospital located 60 miles east of Los Angeles, is part of a conglomerate that includes four hospitals - University Hospital, Children’s Hospital, East Campus Hospital, and the Heart and Surgical Hospital.

The academic medical center maintains a leading market position and its market share is expected to increase based on the opening of its new 106-bed hospital in Murrieta, according to analysts.

But the medical center is challenged by its unfavorable payor mix with over 30% of its gross revenues from Medi-Cal leading to a reliance on disproportionate share funding for operating profitability.

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