S&P and Moody’s Rating Updates Released
Northern Light Health is pleased that Standard and Poor’s (S&P) and Moody’s Investors Service have affirmed our BBB and Ba1 respective ratings.
S&P also affirmed our outlook status as “Stable.” S&P noted, “The stable outlook reflects generally improving pre-pandemic underlying performance at Northern Light Health’s clinical assets that have produced debt service coverage and a stable balance sheet that are in line with rating level expectations. Although earnings are weak in fiscal 2020 due to the pandemic, we believe that Northern Light Health’s solid enterprise profile, stable balance sheet, and improving track record prior to the pandemic support the current rating.”
While Moody’s affirmed our rating, we are disappointed that they changed our outlook from stable to negative. The Moody’s outlook revision reflects their expectations of very narrow prospective compliance with quarterly debt covenants over the next year given the impact COVID-19 may have on operations. Northern Light Health has not violated any debt covenants.
Overall, we have a positive story to tell. Northern Light Health remained dedicated to our employees while they were dedicated to caring for our patients, community, and one another. We weathered the coronavirus pandemic without mandatory staff furloughs or sweeping changes in staffing levels. And we are exceptionally pleased that Northern Light Health accelerated provider recruitment during the pandemic, increasing the number of providers hired by 25% over last year. More than 50 providers accepted offers of employment based only on virtual visits. This approach met COVID-19 health concerns and helped reduce our spend on locums and overall operating performance. This proactive approach was the right thing to do. As the second wave of COVID-19 is being felt across the nation, our system is prepared and responding in a thoughtful, coordinated, informed manner.
Since forced cancelations in the spring, our volume recovery has been largely exceptional, with recovery stronger in some areas than others. We remain proactive. In the coming months the work we are doing to extend our Operational Excellence program will be picking up steam throughout Northern Light Health as we continue to find areas of efficiency to meet the needs of our patients and communities.