Deaconess proposes bringing Jenny Stewart debt under system trust; court questions employee leave and medical-record access

Deaconess Health System told the Christian County Fiscal Court that it intends to bring Jenny Stewart’s outstanding debt under Deaconess’ Master Trust Indenture so both bond series would stand on parity under the system’s credit umbrella. Cheryl Watson, identified in the meeting as Deaconess’ chief financial officer, said the move would allow bondholders to “look at the entire system’s assets and revenue streams” rather than Jenny Stewart’s assets alone.

The presentation outlined two separate financing series. Court members were told a private placement obtained in 2022 was about $32,000,000, while a 2016 public issue was discussed during the meeting as roughly $62,900,000. Watson also cited differing credit ratings, saying Deaconess is rated “AA by Fitch” and “A plus by S&P,” while Jenny Stewart’s rating was described as “BBB minus,” and argued the change would improve parity and credit support.

Why the issue matters: moving Jenny Stewart debt under Deaconess’ master trust indenture would expand the revenue sources available to bondholders and could affect the credit profile and local fiduciary considerations tied to long-standing hospital debt.

Magistrates raised two operational concerns during a sustained question-and-answer session. Several said employees reported that accrued leave and sick time had been reset to zero after an October 1 transition. Mark Laramie, introduced as Jenny Stewart’s chief financial officer, said the organizations reviewed their extended-leave policy in September, and staff who met the policy’s payout criteria were paid out. “We ended up paying out everybody that had that leave time based on the existing policy,” Laramie said.

Court members also pressed officials about electronic medical records. Multiple magistrates said patients and some providers could not see historical medical history in the new portal in early October. Laramie responded that historical records remain accessible and that the organizations had not chosen a date to terminate prior-system access. He said providers already have access and that the system will provide additional training and public notice before any access is removed. “We will follow the Kentucky laws with regard to records,” he added, and officials agreed to take additional training and communications as a takeaway.

What the court did: after the discussion the court moved on to other agenda items; there was no formal county vote recorded in the transcript specifically approving a change to bond documentation during this meeting.

What’s next: county officials said they will pursue clarifying communications to staff and the public about record access and will follow up with further information about employee payouts and the timing of any portal changes.