Fitch Ratings has downgraded more than $131 million worth of revenue bonds issued on behalf of the Valley Baptist Health System in Harlingen, Texas.
The New York-based ratings agency has downgraded $94 million worth of Tarrant County Health Facilities Development Corporation series 2007 revenue bonds and $37.6 million worth of Rio Grande Valley Health Facilities Development Corporation revenue bonds (series 1992A&B) to 'BB' from 'BBB.'
Valley Baptist operates two acute care facilities in Harlingen and Brownsville, Texas, with a total of 828 beds. In fiscal 2009, the health system reported $534.4 million of total revenues and support.
According to analysts in Fitch’s Chicago offices, the downgrades reflect the release of the health system's audited financial statements for fiscal years 2008 and 2009, which show a significant deterioration in balance sheet liquidity since fiscal 2007, as well as negative operating profitability in each of the last two fiscal years.
Fitch analysts also assigned a negative outlook to the health system’s ratings, reflecting the firm’s concerns over the lack of liquidity growth.
Valley Baptist holds a leading market share position of nearly 60 percent in its south Texas region, but the health system has a weak payer mix, according to Fitch.