Catholic Health Services of Long Island rating affirmed at A- as Fitch keeps negative outlook

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CHS Long Island rating affirmed

Highlights

Catholic Health Services of Long Island's A- rating affirmed by Fitch, with a negative outlook due to weak fiscal 2024–2026 results and ongoing expense pressures.
Fitch notes management's turnaround plans are achievable but carry high execution risk, targeting access, volume, supply chain, pharmacy, cost standardization, and governance.
As of March 31, 2026, Catholic Health holds $1.52 billion in unrestricted cash and investments (140 days cash on hand), offsetting weakened cash flow despite market share lag and margin challenges.

Credit rating action and operating pressures

As reported by Fitch Ratings, the agency has affirmed Catholic Health's Issuer Default Rating and the ratings on its outstanding series 2014 revenue bonds and series 2020 taxable bonds at A-. The negative outlook reflects very weak results in fiscal 2024, fiscal 2025 and the first quarter of fiscal 2026, with operating expenses continuing to weigh on revenue growth.

Fitch says the affirmation also reflects expectations that management's turnaround measures are achievable. Those initiatives include improving access, increasing volumes, strengthening supply chain terms, improving pharmacy performance, standardizing costs across the system and streamlining governance, although the agency says execution risk remains high.

The bonds are secured by a pledge of gross revenue on the Catholic Health obligated group. Fitch adds that the completion of the large capital project at Good Samaritan University Hospital gives the system greater flexibility as capital spending is set to decline.

Long Island market position and balance sheet support

Fitch assesses Catholic Health's revenue defensibility as midrange, citing the system's 18% market share on Long Island in 2025. That places it behind regional leader Northwell Health, which holds a 39% share, while Catholic Health continues to benefit from a strong cardiology franchise led by St. Francis Hospital and Heart Center.

The agency assesses operating risk as weaker because of several years of pressured performance and only modest EBITDA generation. At the same time, Fitch views the financial profile as strong, supported by healthy liquidity despite weaker cash flow and reserve declines linked in part to recent capital spending.

As of March 31, 2026, Catholic Health reports $1.52 billion in unrestricted cash and investments, equal to 140 days cash on hand. That liquidity position and moderate leverage remain important support factors for the rating even as margin recovery remains a central challenge.

Our earlier report on Fitch Ratings’ upgrade of Arizona Fire & Medical Authority to AA+ explained that the higher rating was driven by sustained general fund reserves above key thresholds and a materially improved long-term liability burden. We also noted that Maricopa County’s strong economic and demographic growth underpinned the stable outlook, while the agency’s series 2021 certificates of participation were rated a notch lower due to annual appropriation risk.

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