CHW Credit Rating Drops After Larger than Expected Losses
"Struggling" Catholic Healthcare West remains in the "financial sick bay," having lost almost $90 million more than expected in fiscal year 2000, the San Francisco Business Times reports. With $2.4 billion in outstanding debt, CHW has not posted a profit since 1996. Audited figures from the last fiscal year show the company lost $317.9 million on operating revenue of $4 billion. The company had estimated losses at $229 million for the year. Lisa Zuckerman, associate director of health care for Standard & Poor's, said, "The numbers showed a higher variance from their plan. They have had difficultly demonstrating an ability to achieve their stated financial targets." The company blamed the losses on "long overdue accounts" for services at a Bakersfield hospital and "write-downs" left over from a 1988 acquisition. Standard & Poor's put CHW on a "credit watch," downgrading its financial outlook from "neutral" to "negative." Such a credit rating is meant to alert investors that a "significant change" in credit rating or outlook is possible within 90 days. CHW recently hired a new CEO and named a CFO, who will start in January. Standard & Poor's analysts, who say the losses "reflect earlier policy decisions," plan to meet with CHW's new management team "in the next three months." Zuckerman said, "We would like to hear what the new management team has to say" (Doherty, San Francisco Business Times, 11/21).