Standard & Poor's Ratings Services said it lowered its rating on Albany Dougherty County Hospital Authority, Ga.'s revenue debt, issued for Phoebe Putney Memorial Hospital, one notch to A-plus from AA-minus.
The outlook is negative.
This downgrade reflects Standard & Poor's opinion that the full fiscal 2014 results were worse than management had projected and below Standard & Poor's expectations and that fiscal 2015 continues to reflect weak operating performance.
The rating service had revised the outlook on Phoebe Putney to negative from stable in February 2014 due to operating losses.
Standard & Poor's understands management has put a corrective action plan in place, but the rating service does not expect an immediate return to robust operating income.
The organization maintains a strong balance sheet, highlighted by low debt and unrestricted reserves commensurate with the A-plus rating category.
Standard & Poor's believes the balance sheet provides some flexibility and time for management to implement operating improvement initiatives. If management does not successfully implement improvement initiatives, however, the rating service could lower the rating.
"We could lower the rating if management cannot successfully implement its strategic initiatives that would allow it to meet budgeted expectations in fiscal 2015 or if the balance sheet were to weaken significantly," said Standard & Poor's credit analyst Margaret McNamara. "We could revise the outlook to stable if operating performance were to improve materially such that it meets budgeted expectations for fiscal 2016 and that management maintains the balance sheet at or near current levels."
