S&P Global Ratings on July 9 raised its issuer credit rating on Quincy Health LLC, operating through subsidiary Quorum Health Corp., to CCC- and a negative outlook, from Selective Default, or SD, after the company’s conversion of some of its interest payments to PIK.
S&P also upgraded the company’s term loan to CCC-, from D. The agency noted that 80% of the April interest payment and 40% of the July payment were shifted to PIK.
On July 2, S&P downgraded Quincy Health to SD, from CCC- and a negative outlook, citing the interest payment conversion to PIK. S&P also lowered the company’s term loan to D, from CCC.
S&P said its new CCC- rating for Quorum reflects “potential for a default or [a] distressed exchange within six months.”
On May 21, Quorum announced a definitive agreement with QKA Health Corporation, doing business as Healthside Partners. The company said the transaction will enable Quorum to transition from a “for-profit, private equity-backed model to a nonprofit health system.” S&P anticipates the deal will close by year-end 2026, adding that, when the transaction is complete, investors in the company bear a “substantial risk that … [they] will not be repaid in full.”
Conversely, if the transaction does not close by then, S&P believes Quorum “cannot support its debt given minimal free cash flow and weak liquidity,” including $19.8 million of balance sheet cash and $200,000 of ABL revolver availability as of March 2026.
On July 7, Moody’s appended a limited default designation to the probability of default rating of Quorum Health Corp., revising it to Ca-PD/LD, after the company extended the grace period on its missed April interest payment and amended its senior loan credit agreement to allow a “material” portion of interest due in both April and July to be paid partially in PIK during the lengthened period.
Moody’s said it viewed the failure to pay interest in cash, as originally agreed, as a limited default. The agency added that its rating reflects its view that Quorum’s likelihood of a near-term default is “very high,” as the company will continue burning cash this year.
Quorum operates 11 hospitals and provides outpatient services in nine US states.
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