• Thu. Jun 20th, 2024

Tower Health’s $1.5 Billion Debt Looms Large as S&P Downgrades Credit Rating

BySamantha Jones

May 22, 2024
Tower Health receives another credit downgrade from S&P Ratings

Tower Health, a nonprofit health system located in Pennsylvania, has had its credit rating downgraded by Standard & Poor’s from CCC+ to CCC on Tuesday. The downgrade was due to the organization’s low financial reserves and concerns about its ability to pay off $64.6 million in bonds that are due in February. Despite efforts to cut costs, improve bill collection, and sell or close unprofitable businesses, Tower Health continues to face financial challenges due to high labor costs and inflation.

Tower Health strongly disagrees with S&P’s rating decision and believes it does not accurately reflect the organization’s positive momentum and financial performance. With bond payoff deadlines quickly approaching, Tower Health faces a risky investment profile that requires a favorable business environment to meet its debt obligations.

The long-term debt of Tower Health stands at about $1.5 billion, which exceeds its unrestricted reserves of $159.8 million as of December 31. This precarious financial position has prompted the organization to consider negotiating debt relief with bondholders in order to potentially extend deadlines and address its financial challenges.

Despite closing or selling some hospitals, Tower Health continues to own several facilities, including Phoenixville and Pottstown Hospitals and a stake in St. Christopher’s Hospital for Children in Philadelphia. In order to address its financial issues, Tower Health has engaged the services of investment bank Houlihan Lokey to explore refinancing options.

By Samantha Jones

As a content writer at newsnnk.com, I weave words into captivating stories that inform and engage our readers. With a passion for storytelling and an eye for detail, I strive to deliver high-quality and engaging content that resonates with our audience. From breaking news to thought-provoking features, I am dedicated to providing informative and compelling articles that keep our readers informed and entertained. Join me on this journey as we explore the world through the power of words.

Leave a Reply