In the first quarter, Moody's downgraded $988 million in not-for-profit healthcare debt and upgraded $658.1 million, for a ratio of 1.5 to 1. The ratio for downgraded issuers versus upgraded issuers during the quarter was 2 to 1 ratio—the same ratio as in the fourth quarter of 2012, when there were 10 downgrades and five upgrades. The nine rating changes in the first quarter of 2013 were a decline from the 22 rating changes during the first quarter of 2012, when there was an even split between downgrades and upgrades, Moody's announced.
Goldstein predicts the ongoing rush towards mergers and acquisitions and other provider consolidations will accelerate in the coming months and years.
While there was some softness in M&A activity overall in the first quarter of 2013, according to a report from research firm Irving Levin Associates, Goldstein is seeing an upswing.
"The climate we are in for consolidation is pretty heavy and it seems like once a week there is an announcement about somebody talking about somebody," she says. "We are in the second wave of heavy M&A activity. The first wave was about 12-13 years ago. Now it is back. A lot of this is driven by reimbursement top-line revenue pressures. People say we are going to be better if we are part of a bigger system, or we are big but we need to be bigger for scale. We are in it as we speak, this rapidly accelerating M&A period."