Staff reports
Magnolia Regional Health Center’s revenue bond rating was recently downgraded, and the outlook “remains negative.”
Moody’s, a global credit rating agency, recently downgraded the Corinth hospital’s revenue bonds from Baa3 to Ba3, impacting more than $75 million in debt.
The hospital’s bonds are now in a rating category viewed by Moody’s as “speculative” and “subject to substantial credit risk.” The hospital’s bonds are also rated at the low end of the Ba classification. Prior to the downgrade, MRHC’s bonds were considered moderate risk.
MRHC is a 200-bed hospital jointly owned by the city of Corinth and Alcorn County.
“The negative outlook represents our view that an event of default is likely over the next year, which may cause an acceleration of the bonds,” a Moody’s news release stated. “Additionally, based on interim performance through the first five months of fiscal 2018, and absent a covenant amendment, waiver or strategy to remove pension-related accounting changes from the computation, we expect MRHC will fall below 1.0 times debt service coverage per the covenant definition in fiscal 2018, causing an Event of Default to be declared on February 28, 2019.”
A number of reasons were cited by Moody’s as the reason for MRHC receiving the downgrade. They include, a “breach of the debt service coverage ratio covenant in fiscal 2017 and inability to grow liquidity,” the news release said.
There is also “continued pressure on absolute cash, resulting in narrowing headroom to the 65 days cash covenant,” Moody’s added.
MRHC is “an essential healthcare provider to the market” and “continues to make full and timely debt service payments on its all-fixed rate bond structure and the debt service reserve fund remains fully funded,” Moody’s said.
The hospital’s participation in the Mississippi Public Employees Retirement System “will pressure long-term financial performance, and is elevating near-term risk of a covenant breach and debt acceleration in early 2019.”
Not meeting certain bond covenants could require the hospital to hire a consultant or even go into default, according to Moody’s.
The hospital said in a statement that the downgraded bond rating is a result of accounting standards that require MRHC and other public hospitals “to record on their financials their portion of the unfunded liability of the Public Employees’ Retirement System. Although these liabilities appear on our financial statements, we have paid all of our contributions required by PERS.
“I can ensure you that our hospital is firmly planted on a solid financial foundation and is equipped to move forward and continue growing to meet the needs of the people we serve,” MRHC CEO Ronny Humes said in a statement.
That great ceo like the rest of them has got them in debt. Need intelligent board members that know how to pick ceo’s
I’m glad i don’t work there anymore. The administration is running the hospital into the ground. The accountability of staff was shocking low. I work for a real hospital now and i’m much happier and better paid.
The best part of MRHC is SICU. Heart surgeons and Dr. Pratt are awesome!
The county and city should release the hospital and let someone else “own” it. Then they would have to pay land and business tax like everyone else that lives and works here. Our schools need the money and because they are “owned” by the city/ county they pay nothing! There is no benefit for our county/city to “own” the hospital.
When my dad was there he was beginning to act agitated I requested his Valium and was refused because they were “in the middle of shift change” the nurse pulled MORPHINE OUT OF HER POCKET and as she said “I have his morphine in my pocket, I will give him a dose” she sticks the syringe in his mouth and gives the medication. Number 1 why in the hell are you carrying a drug like morphine in your pocket!?!? Number 2 he didn’t need pain medication. Then about 10 minutes later he began having a seizure. When I pushed the call button I said I need a nurse they asked “,what do you need?” I said I need a nurse, they asked “what’s the problem” I ran out to the hall and screamed get me some help in here NOW!! BY the time they got there he had come out of it, it was very mild, short. I told them he’s had a seizure he needs that Valium. They told me “call is back if it happens again.” My cousin came in daddy spoke to him for about 5 minutes and had another seizure I called them back my cousin and I both told them he’s having seizures. I’m crying begging them to get the Valium while they try to carry on a conversation with my dad. After about 3 minutes of them trying to talk to my dad and me begging for his Valium daddy had another seizure and stopped his heart and he died. Had she given the Valium when I asked for it for the agitation,which is often a precursor to seizures, good chance he wouldn’t have had 3 seizures back to back and would not have died at that time. So many problems with their actions. After daddy died they refused to give me access to his records. I finally got an itemized bill. Daddy hadn’t received his tegratol for3 days prior to his death. When you abruptly stop seizure meds you risk seizure activity like this. Incompetence!!