While continuing to rely on its core metrics and methodology to evaluate the credit risks being borne by not-for-profit hospitals, Moody’s Investors Service has identified four factors that will be critical in determining the "rating roadmap" for the sector in 2009.
The Moody’s report outlines how its rating analysis will focus on four special risk factors in 2009 to determine when rating action is warranted, including weaker market demand and declining cashflow margins, investment losses, and weaker balance sheets. Other items of concern include debt structure, liquidity stress, and market access problems.
"U.S. not-for-profit healthcare was among the first sectors to experience rapid financial weakening due to the deep recession and credit crisis," said Moody's Senior Vice President Lisa Goldstein, author of the report. "Nearly all rated hospitals are expected to report weaker financial performance in 2009 due to the economic problems that accelerated throughout 2008 and prompted our change in outlook to negative from stable in November."
The report, Not-for-Profit Healthcare Rating Roadmap, is available at www.moodys.com.
