Fitch Ratings downgraded Temple University Health System's bonds by one notch, knocking them down into noninvestment-grade territory, but giving the system a stable outlook.
The downgrade to "BB+" from "BBB-" was based on the health system's $59.3 million operating loss for the nine months ended March 31, caused by a slower-than-expected ramp-up of patient volumes from high-profile doctors recruited to Temple University Hospital, significantly higher professional liability costs, and other factors, the ratings agency said.
"The people we've recruited have clearly produced. It just takes a while before you see the results," the system's chief executive Larry R. Kaiser said.
Kaiser said no job cuts were needed to ensure that the system meets its debt-service requirements for the year ending June 30. - Harold Brubaker