Moody's Investors Service said it has downgraded to A3 from A2 the rating assigned to Orlando Health Inc.'s (formerly known as Orlando Regional Healthcare System) $856 million of outstanding bonds issued by the Orange County Health Facilities Authority.

The rating outlook is revised to negative from stable.

The rating downgrade reflects the organization's material downturn in financial performance through nine months of fiscal year 2013, combined with significant reductions in same-facility patient volumes and market share, and decline in liquidity.

The rating downgrade reflects Orlando Health's decline in combined same-store inpatient admissions and observation stays, loss of market share, and declines in liquidity.

The negative outlook reflects additional challenges faced by Orlando Health that distract the organization as it attempts to implement its performance improvement plan including the lack of a permanent chief executive officer and strained labor relations that has resulted in some union activity on the hospital campus.

In addition, the system is in the middle of a large construction project. The rating could be downgraded further if Orlando Health is unable to show improvement in financial performance in FY 2014, or if the organization experiences further declines in current cash levels.

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