NORMAN - Financial concerns continue to grow surrounding the solvency of Norman Regional Hospital after U.S.-based financial services company S&P Global lowered the hospital’s debt rating earlier this month to “D” (default).
The Sept. 9 report on the S&P Global available at spglobal. com/ratings, said the downgrade from “CC” is due to NRHS (Norman Regional Health System) making “less than full and timely debt service on its Sept. 1, 2026, principal and interest payment date.” The series of revenue bonds were issued in 2016, 2017 and 2019.
According to the S&P, a rating of “CC” is one of the lowest- grade/speculative-grade rates, which signals that the obligor is in severe financial distress. It is considered a red flag for extreme credit risk. The hospital authority’s debt was placed on “credit watch,” with negative implications, on Aug. 31.
Norman Regional Hospital is the central facility of the Norman Regional Health System and is governed by the Norman Regional Hospital Authority, which is a public trust. The hospital system includes multiple campuses, urgent care centers, specialty clinics and emergency services, all of which are under the oversight of the public trust. Norman Regional does not receive direct city funding, according to its website.
The master trustee, listed as Argent Trust Oklahoma in the NRHA board business meeting agenda dated Aug. 24, 2026, reported to bondholders on Sept. 4 that the scheduled debt service had not been remitted and the payment was deferred while the trust works to complete a financing transaction, according to the S&P Global report.
There is not a formal grace period and “the trustee, acting with the support and direction of an ad hoc group of institutional bondholders comprising a majority in principal amount of the three series, has agreed to forbear from exercising rights and remedies related to the missed Sept. 1 payment through Sept. 15, 2026, under the terms of a bridge letter acknowledged by NRHA,” said the report.
A trustee’s notice stated that NRHA and the majority bondholders did reach an agreement in principle which will permit NRHA to issue $40 million in a series of 2026 senior revenue bonds. The new bond series is to be purchased by the majority bondholders and the proceeds will support NRHS’ financial improvement process. It will also complete the deferred Sept. 1, 2026, debt service payment.
The 2026 senior revenue bond series will have priority over the rated bonds and will require additional security in the form of real and personal property of NRHA.
Local response
Norman City Mayor Stephen Tyler Holman shared a post last week Facebook from Dr. Kelley Lobb, chair of the Norman Regional Hospital Authority Board.
“Norman Regional is going through one of the most difficult chapters in its history,” Lobb wrote. “And I know people are angry. I know there are questions about decisions that were made in the past. I see the comments on social media. I hear the frustration throughout our community. And I understand it.”
She said that many of the people who are leading Norman Regional today shared the same frustration when they were health care workers themselves, before being asked to take on leadership roles.
“I was given a choice. I could stand on the outside and continue talking about what needed to change. Or I could step inside and help change it. So I stepped in.
“In late 2024 as the leadership was crumbling I walked in having no idea the depth of repair that was needed. And I wasn’t alone. Something I wish more people knew is that the leadership working to save Norman Regional today is not the same leadership that made many of the decisions now being criticized,” Lobb said.
Holman gave a brief review of Norman Regional’s history in his post.
“Norman Municipal Hospital opened in 1946 after Norman voters approved bonds to help build the hospital. In 1969, Norman Regional was restructured as a public trust, creating the structure under which the health system continues to operate today.
“Norman Regional is not owned by an out-of-state healthcare corporation with corporate profit margins and shareholders to satisfy. It is an independent, nonprofit community health system operated by the Norman Regional Hospital Authority, a public trust that serves the public interest. Money it earns is reinvested into the organization rather than distributed to shareholders. In fact, Norman Regional describes itself as one of the last independent health systems in America.
“That local connection extends to its governance as well. Members of the Norman Regional Hospital Authority Board are appointed locally through the City of Norman, providing another direct connection between the hospital and the community it serves. The City is not involved in the operations or decisions of the board or the hospital itself,” Holman said in his Facebook post.
Ratings decline
As far back as March 2009, Fitch Ratings (one of the “big three” credit rating agencies among Moody’s and S&P Global) downgraded NRHA bonds to “BBB-” noting “outlook to negative.” The hospital authority’s credit standing had previously been listed as stable. Fitchratings. com reported at the time that the “increased risk profile was due to significant deterioration in its operating environment in light of a sizable debt burden and weak liquidity position. At Dec. 31, 2008, NRHA’s unrestricted cash and investment position had declined to $50.3 million from $64.7 million at June 30, 2008, and $84.8 million at June 30, 2007.”
The report also mentioned that NRHA continued at the time to struggle with cost overruns at the Healthplex campus. The total project costs grew from an original estimate of $90 million in 2005 to $134 million at the time of the Fitch Rating report in 2009.
The debt rating continued to fall over the next several years, as S&P Global lowered NRHA’s score five notches to “B” in January 2025 based on “weakening liquidity — outlook negative.”
S&P Global noted in their Sept. 9 report that they will reassess NRHA’s rating following the “resolution of the September 2026 debt service payment incorporating the terms of any completed financing and amended bond documents.”
About Norman Regional Norman Regional Hospital is located at the intersection of 1-35 and Tecumseh Road in Norman. The newly expanded 775,000-squarefoot acute-care hospital is licensed for 326 beds and offers comprehensive services, including cardiovascular, spine and orthopedic surgery, labor and delivery, inpatient physical therapy, emergency room and OB-GYN services.
Norman Regional was the first in the Oklahoma City metro area to receive Chest Pain Accreditation with PCI (Percutaneous Coronary Intervention) from the Society of Cardiovascular Patient Care (SCPC).
In addition, Norman Regional also operates two freestanding emergency room plus facilities:
•Norman Regional Moore: Situated on 1-35 in Moore, Oklahoma, offering 24/7 emergency services, diagnostic imaging, lab services and physical therapy.
•Norman Regional Nine: Located at the intersection of Highway 9 and 24th Avenue Southeast in Norman, this facility includes a 12-bed emergency room, primary and specialty care clinics, imaging, lab services, physical rehabilitation, and more to meet the needs of the growing areas of east Norman, Noble and beyond.