PITTSBURGH (AP) -- Moody's Investors Service has lowered the bond rating of the Pittsburgh-based West Penn Allegheny Health System even further into junk bond status because the hospital network may file for bankruptcy protection.
Highmark Inc. has proposed a $475 million takeover, but wants West Penn to file Chapter 11 at part of that process in hopes of trimming the network's debt. West Penn has $750 million in bond debt and $280 million in unfunded pension liabilities.
Moody's knocked the rating down from 'Caa' to 'Ca' on Tuesday, its next-to-lowest bond rating. West Penn has the lowest rating of more than 400 health agencies rated by Moody's.
West Penn tried to nix the Highmark deal over the insistence that it file for bankruptcy, but a county judge wouldn't let West Penn walk away. Takeover negotiations have been ongoing.