Hunter
03/22/23
The internationally-known Moody’s Investors Service has downgraded Mercy Iowa City’s credit rating.
The Gazette reports Moody’s announced the downgrade after what they called “severe cash flow deterioration, from historically weak levels, which has resulted in material and rapid cash burn.”
The Mercy credit rating dropped three spots, from B1 to Caa1, just four ranks above the lowest C rating. Aaa is the top. Analysts also said competition will remain a factor, as the University of Iowa Hospitals and Clinics continues to be financially sound, getting an Aa2 rating from Moody’s last year.
Mike Trachta, the acting President and CEO of Mercy Iowa City, told employees in an e-mail that the rating was based on past performances, and they must keep their focus on providing high-quality care and improving business operations.
Mercy Iowa City is still affiliated with MercyOne, but is looking for another long-term partnership.