KBRA Revises Outlook to Negative on Montefiore Medical Center, NY Guaranteed Debt, Affirms BBB-
11 Jun 2026 | New York
KBRA has revised the Outlook to Negative from Stable on Taxable Revenue Bonds, Series 2017 (Payable Solely from Albert Einstein College of Medicine Promissory notes Guaranteed by Montefiore Medical Center) issued by the Public Finance Authority of Wisconsin. The long-term rating was concurrently affirmed at BBB-.
The Outlook revision reflects Montefiore Medical Center’s (MMC’s or the “Medical Center’s”) materially weakened operating performance in CY 2025, resulting in a pronounced decline in maximum annual debt service coverage (MADS) to 1.29x from 3.4x and days cash on hand to 58 from 80. Q1 2026 results highlight continued operating pressure, partially attributable to severe winter weather and a costly nursing strike, with further erosion in unrestricted cash & investments.
The BBB- rating continues to recognize MMC’s favorable relationship with the State of New York (the "State") and the critical role the organization plays in providing care to a diverse population; demonstrated history of implementing strategies to address operating challenges; market dominance within its primary service area (Bronx County, NY) and growing presence in affluent suburban communities north of New York City; and strong clinical reputation, which continues to fuel healthy inpatient and outpatient volumes. Counterbalancing the aforementioned strengths is the Medical Center’s limited financial flexibility, highlighted by very low liquidity and elevated leverage, and disproportionate exposure to governmental payors and evolving reimbursement models given the socioeconomic profile of its patient population.
The Taxable Revenue Bonds, 2017 Series (the "2017 Bonds”) are secured by payments made by the Albert Einstein College of Medicine (AECOM or the "College”) on the underlying Promissory Notes (the "Notes”), which benefit from an unconditional and irrevocable guaranty from the Medical Center under a Guaranty Agreement (the "Agreement”). Debt service on the 2017 Bonds is payable first from AECOM cash flow, with any shortfall made up through a draw under the Agreement. As a result, KBRA’s rating is based on its view of the Medical Center’s overall credit profile in its role as guarantor.
A Surveillance Report will follow.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Dominant market position in primary service area (Bronx County, NY) and a growing presence in affluent suburbs.
- Strong clinical reputation to support healthy inpatient and outpatient volumes and recognized leader in care management and population health.
- Substantial State support, including financial through the DPT program.
Credit Challenges
- Limited financial flexibility, highlighted by weak liquidity cushion relative to operations and leverage.
- Inability to sustain a positive operating margin.
- Disproportionate exposure to governmental payors, which subjects MMC to an evolving Medicaid funding landscape.
Rating Sensitivities
For Upgrade
- Significant increase in liquidity.
- Sustained improvement in operating performance to a level consistently above breakeven.
- Material reduction in leverage.
For Downgrade
- Further, material deterioration in already weak liquidity.
- Higher debt, prolonged weak operating performance, or additional financial demands on MMC from system affiliates.
- While not anticipated, a weakened relationship with the State.
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