Moody’s Investors Service has downgraded Nuvance Health’s revenue bond rating to Baa3 from Baa2. The outlook is negative at the lower rating level. Nuvance has approximately $1 billion of debt outstanding.
The downgrade to Baa3 reflects weakened operating performance and reduced liquidity. While management has outlined strategies to structurally reduce costs and rebuild operating cash flow, the speed of progress is uncertain due to persistently high labor and supply costs as well as weak clinical demand trends. Relatively thin cash and liquidity will remain a credit challenge for the foreseeable future, and the system will have limited capacity to invest in capital absent improvement in operations, Moody’s said. Though Moody’s expects Nuvance will breach its debt service coverage covenant at fiscal year-end 2023, there is no acceleration risk this year due to a two year coverage test. Read more.
Moody’s Downgrades Nuvance Health
