Standard & Poor’s last week downgraded MetroHealth System to BBB-plus from A-minus due to weak operating results. The action affects $28.8 million of variable-rate bonds issued in 2003 through Cuyahoga County. The bonds carry a letter of credit but Standard & Poor’s does not rate it.
MetroHealth is the safety-net hospital for the county and its charity care rose by $30 million in 2007. Analysts said the system reported weaker financial operating results for fiscal 2007 along with slightly weaker liquidity, which had always been below average.
The current rating level reflects the system’s strong and ongoing history of support from the AA-plus rated county, a unique business position as a primary and tertiary medical service provider for county residents, and improved operating results for the 10 months ended Oct. 31, 2008.
“The outlook is stable at this time due to the turnaround plan currently underway that has yielded a better 2008 fiscal year for the first 10 months,” analyst Antionette Maxwell wrote.
MetroHealth does not have any plans to issue new debt in the next 12 to 18 months.