After defaulting on approximately $60 million worth of municipal bonds, Jackson Hospital and Clinic in Montgomery has been given S&P Global’s lowest bond rating, according to Bloomberg.

In August, UMB NA, the bond trustee, requested full payment of all principal and interest, citing the hospital’s failure to make rent and lease payments for five months.

The defaulted bonds represent 86% of the hospital’s long-term debt.

“The ‘D’ rating reflects that Jackson missed its most recent interest payment to bondholders on the series 2015 bonds, which was due on Sept. 3, 2024,” said S&P Global Ratings credit analyst Marc Arcas. “The ‘D’ rating, by definition, indicates that the obligation is in default or in breach of an imputed promise, and this rating category is used when payments on an obligation are not made on the due date.”

Dr. Donald Williamson, President of the Alabama Hospital Association, said the hospital’s rating points to a larger issue that could worsen if not addressed.

“While the access crisis will be worse in already underserved rural areas, as local hospitals close and patients pursue care in larger centers, many of the financially precarious urban facilities may not have the resources or capacity to absorb the volume. This report should be the canary in the coal mine for our state and national leaders to ensure the system avoids collapse.”

Also according to Bloomberg, the last time the hospital sold publicly offered municipal debt was in 2015, when it brought $84 million to market to refinance outstanding securities and pay for capital improvements.

Austen Shipley is a staff writer for Yellowhammer News. You can follow him on X @ShipleyAusten