Junk-rated Norman Regional Health System in Oklahoma expects to close later this month on interim financing to make a debt service payment that was due on Sept. 1.
In a statement, the system said an agreement with bondholders delayed the bond payment until it can close on an approximately $40 million financing, which is expected to happen by Sept. 15. It added that as a condition of the financing, "any and all technical defaults prior to the closing will be waived or otherwise cured upon closing."
Uncertainty over when or if the $7.1 million principal and $4.9 million interest payment would be made led S&P Global Ratings on Aug. 31 to downgrade the system's long-term rating to CC from CCC for revenue bonds issued through the Norman Regional Hospital Authority in 2016, 2017, and 2019 and place the lowered rating on CreditWatch for a potential further downgrade to D.
"The (CC) rating reflects our view that NRHS has effectively exhausted its financial flexibility absent an external source of funds," S&P said, adding while the system's operating results improved in fiscal 2026, maximum annual debt service coverage remained below one times.
The health system had $247.45 million of outstanding bonds from the three issues as of June 30, 2025, according to its
In 2025, Moody's Rating downgraded the system's rating to Caa2 with a negative outlook from B1, citing management turnover and "
Aaron Boyd, the health system's president and CEO, expressed optimism about its future.
"Although the payment scenario has obviously been a challenging one given the complexity and timing, the fact that we have been able to attract financing reflects the positive year-over-year operating results that the organization has achieved," he said in the statement. "It also reflects buy-in and understanding from the bondholders, our other creditors, our governing board and executive leadership that the remainder of the turnaround journey is underway and feasible."
