Moody's Investors Service has downgraded Ohio Valley General Hospital, Pa.'s bond rating to Ba3 from Ba2, affecting $25.7 million of outstanding bonds issued by the Allegheny County Hospital Development Authority.
The outlook remains negative.
The downgrade to Ba3 from Ba2 reflects Ohio Valley's continued operating losses and volume declines during FY 2012, higher operating losses through six months of FY 2013, growth in pension liability, increasing risk to Medicare cuts given the hospital's high Medicare level, and expected increase in capital spending.
The rating also reflects the hospital's small size in a competitive market, dependence on a limited number of physicians for admissions, high debt load and risks related to the hospital's asset allocation.
The hospital's strengths include a strong liquidity position, somewhat improved (thought still weak) operating performance and conservative debt structure. The negative outlook reflects the risks of continued volume and market share declines, and operating losses that are likely to continue in FY 2013.