Moody’s Investors Service has downgraded MultiCare Health System’s revenue bonds to “A1” from “Aa3,” and revised the health system’s rating outlook to negative from stable. 

Moody’s said the downgrade and the revision of the outlook to negative reflect several pressures that weaken the health system’s credit profile, including an unexpected 24 percent increase in debt, a decline in liquidity and significant operating losses through the first six months of fiscal 2022. 

“Operations are expected to improve through the second half of fiscal 2022, but nevertheless full year results will remain weak, providing at best thin headroom to MultiCare’s debt service coverage covenant,” Moody’s said. 

Moody’s noted that MultiCare, an 11-hospital system based in Tacoma, Wash., will continue to benefit from several strengths, including a large and growing revenue base and strong clinical offerings.