The negative ratings watch was disclosed by Fitch on Tuesday, affecting Novant’s “AA-” long-term issuer default rating and “AA-” revenue ratings on various series of bonds.

As per the announcement made in November, Novant is set to purchase Hilton Head Hospital in Beaufort County, Coastal Carolina Hospital in Jasper County, and East Cooper Medical Center in Charleston County from Tenet Healthcare.

This significant transaction is expected to be finalized early next year, pending customary regulatory approvals, clearances, and closing conditions.

The “AA-” rating by Fitch is among the second-highest bond ratings and signifies investment grade bonds that are considered low-risk and low-return.

According to Investopedia, a negative watch indicates a company’s potential underperformance compared to its peers due to its current financial condition.

Fitch has expressed its intention to have discussions with Novant management closer to the transaction’s closing to assess the impact of the purchase financing structure and the addition of the three hospitals on Novant’s operating risk and financial profiles.

Fitch also cautioned that due to the magnitude of the purchase, any positive movement on the rating is unlikely over the rating outlook period.

In response, Novant stated that they anticipate thorough discussions with rating agencies and other stakeholders about the organization’s financial strength, especially considering the significant size of the transaction.

Additionally, Novant’s planned acquisition includes associated physician practices and other hospital operations, further expanding the organization’s presence in South Carolina.

Novant remains confident in the long-term value that this strategic move will generate, emphasizing their unwavering belief in the positive impact of the acquisitions.

With its advanced capabilities, the AI legalese decoder can be instrumental in comprehending and decoding the intricate legal and financial language used in the acquisition agreement and related documents. Its ability to process and interpret vast amounts of legal text can provide invaluable insights into the potential long-term effects and value of the transaction, aligning with Novant’s vision for the acquisitions. By leveraging the AI legalese decoder, Novant can gain comprehensive clarity on the legal and financial implications, enabling them to make well-informed strategic decisions.