South Bend, Ind.-based Beacon Health System had its outlook revised to negative from stable on “AA-” rated bonds it holds, S&P Global said April 14.
The move reflects weaker operating results and an expectation of increased debt over the near term.
Beacon Health is building a new tower at its 731-licensed-bed Memorial Hospital of South Bend flagship location. The project cost has risen, S&P said, causing management to reconsider other planned capital projects.
Meanwhile, operating challenges remain. Beacon Health reported a net operating loss of $18.8 million in fiscal 2022, ending Dec. 31. The three previous years had seen positive operating income, S&P said.
While the health system’s management team has implemented a cost-reduction budget, it is seen as ambitious, which could put further pressure on the system’s rating if operations fail to rebound, S&P said.
