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White River Health’s Bond Rating RevisedLock Icon

2 min read

You might recall the story about White River Health of Batesville working to improve its finances after it violated a bond covenant for its fiscal year that ended Sept. 30.

Well, last month S&P Global Ratings of New York revised its outlook to negative from stable for the revenue bonds issued for the Batesville health care system.

It did, however, affirm its ‘BBB-’ long-term rating on the revenue bonds. A BBB- rating is considered the lowest investment grade by market participants, according to S&P Global. 

“The revised outlook reflects [White River Health’s] negative margins over the past two fiscal years, coupled with a declining operating reserve balance and failure to satisfy the debt service coverage ratio set forth in bond covenants in fiscal 2023, which required retention of a consultant to remain in compliance with the bond covenants,” S&P Global Ratings credit analyst Khushi Sutaria said in a news release on May 10.

S&P Global said that it would lower the rating if White River didn’t hit certain financial metrics, including a “return closer to positive operations or if there is any additional decrease in days’ cash on hand.”

But S&P said it would revise the outlook to stable if the health system shows that its financial health improved and there was a growth in its days’ cash on hand “that is closer to historical levels.”

Gary Paxson, White River Health president and CEO, recently told Whispers in a statement that while the outlook revision was “certainly understandable,” the health system was “pleased that the overall rating was affirmed.”

“We see that as a positive reflection of the ongoing activities underway to improve performance,” Paxson said. “WRH was eager to work with our consultant to develop margin improvement initiatives earlier this year.”

“Each project is intended to provide sustainable improvements for the next several fiscal years,” he said, “and that is precisely our goal.”

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