Fort Wayne, Ind.-based Parkview Health’s credit rating was downgraded to “A1” from “Aa3” by Moody’s.
The downgrade reflects a lower level of normalized operating performance and increasing capital spend that will likely require additional borrowing, Moody’s said in its Jan. 30 report.
Moody’s said that Parkview has made significant strategic investments, including expansion into new and demographically favorable service areas. These investments are expected to bolster volumes over time, strengthen its market position and support its long-term financial performance. In the short term, however, the initiatives “introduce some uncertainty and will require substantial capital outlays, likely funded in part with additional debt.”
Moody’s is expecting Parkview’s cash on hand to remain near 250 days, and its core operating performance is projected to remain in the 5% to 6% operating cash flow margin range, according to the report.
Parkview has a stable outlook at its new rating.
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