GETTING WORSE: Standard & Poor downgraded Yonkers’ St. John’s Riverside Hospital’s revenue debt to “CCC+” from “B-,” due to the hospital’s continuing operating losses.

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Liquidity is extremely thin, at St.John’s Riverside Hospital, with just over 6 days’ cash on hand

FOR IMMEDIATE RELEASE: S&P Global Ratings lowered its rating to ‘CCC+’ from ‘B-‘ on Yonkers Industrial Development Agency, N.Y.’s existing revenue debt issued for St. John’s Riverside Hospital (SJRH).

PRESS RELEASE: The outlook for St. John’s Riverside Hospital is negative.

YONKERS: St. John’s Riverside Hospital’s ‘CCC+’ rating and negative outlook reflect Standard & Poor’s view of SJRH’s extremely weak financial profile underlined

S&P listed St. John’s Riverside Hospital’s persistent operating losses, extremely weak maximum annual debt service (MADS) coverage, and highly leveraged balance sheet that continues to deteriorate as factors in its further downgrade of the Yonkers healthcare provider.

S&P Global Ratings credit analyst Aamna Shah said, “In addition, liquidity is extremely thin, with just over 6 days’ cash on hand in fiscal 2018.”

An even lower rating is precluded at this time due to a pending $29 million NY Statewide Healthcare Facility Transformation grant award that management indicates will be used to retire its outstanding debt obligations.

Management anticipates the funding will be received in December 2019; however, if the funds to retire existing debt are not received, it is S&P’s opinion that the hospital’s financial commitments appear to be unsustainable in the long term, although the issuer may not face a near term (within 12 months) credit or payment crisis.

In August 2018, the hospital’s Board of Trustees approved of a resolution to begin negotiations to formally integrate into Montefiore Health System (Montefiore).

Management has indicated that SJRH is working with Montefiore to discuss terms to execute on a letter of intent to join Montefiore.

There is still some uncertainty regarding timing; however, management has indicated that a formal affiliation could be possible in 2020.

S&P views the potential integration favorably as the partnership should bring synergies from both a financial and strategic perspective.

All ratings affected by this rating action can be found on S&P Global Ratings’ public website at www.standardandpoors.com.

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