The Centurion Foundation, the Georgia nonprofit attempting to acquire two cash-strapped Rhode Island hospitals, is doubling down on its attempt to sell the bonds needed to finance the deal, although the outlook remains uncertain.
Initial plans called for closing the $160 million bond sale in late May. Because not enough bonds have been sold — at a time of instability in the broader bond market — the offer is ongoing.
Centurion plans to use the funds from the bond sale to finance its acquisition of CharterCARE Health Partners, composed mostly of Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence.
The prospectus has been updated “to answer questions and additional information requests from investors, and to reflect recent positive financial developments and strategic initiatives,” CharterCARE Health Partners CEO Jeffrey H. Liebman wrote in a message to colleagues this week, a copy of which was obtained by The Public’s Radio.
“We continue to move forward on all fronts with optimism,” Liebman wrote.
He added: “Let’s be clear: there is universal support locally to see this sale completed, from elected officials to health system CEOs. Our hospitals and services are essential to the health care delivery system. Our 50,000-plus annual emergency room visits, 17,000 surgeries, cancer and bone marrow transplantation treatments, and 107 behavioral health beds, not to mention countless other specialty programs and outpatient services, are irreplaceable.”
A spokesman for CharterCARE/Centurion did not respond to a question about what percentage of bonds have been sold for the deal.
The Rhode Island House budget unveiled Tuesday boosts reimbursement rates for primary care and includes additional money for hospitals, which could assist efforts to sell the bonds.
Roger Williams and Fatima have lost money for years. If the two safety-net hospitals go bankrupt, the spillover would almost certainly swamp other hospitals in the state.
Centurion has said it has a plan to boost the financial performance of the hospitals, although it’s unclear if returning the entities to nonprofit management will help to save them.
State leaders responded May 1 by issuing an unusual joint statement expressing confidence in Centurion, and Gov. Dan McKee submitted a budget amendment directing $10 million for a behavioral health unit at Fatima.
Rhode Island Attorney General Peter Neronha told The Public’s Radio that a failure to sell enough bonds could land the CharterCARE hospitals back in bankruptcy court in Texas, although his office said there is no deadline for completing the sale.
In March, S&P Global Ratings gave the bonds an initial rating of BB- and called the outlook negative.
“The rating reflects CharterCARE’s cushion of unrestricted reserves in its opening balance sheet, which we believe gives the organization time to implement its improvement plans,” S&P wrote at the time. “However, we also see significant uncertainty about future financial, strategic, and operating performance as CharterCARE begins to operate independently from Prospect, which filed for bankruptcy on Jan. 11, 2025. We have incorporated these risks into our rating partly through the negative outlook, reflecting a one-in-three chance of a rating downgrade within our one-year outlook period.”
