5 hospital, health system credit rating upgrades

At least five hospital and health system credit rating upgrades have occurred in the last six months.

Baptist Healthcare System (Louisville, Ky.) — raised in January from “A2” to “A1” (Moody’s Investors Service); raised in January from “A” to “A+” (Fitch Ratings)

“The upgrade to ‘A1’ is driven by expected durability of strong margins and liquidity, which will be supported by revenue growth and diversification strategies as well as demonstrated discipline around cost management and capital spending,” Moody’s said.

Common Spirit Health (Chicago) — raised in November 2021 from “BBB+” to “A-” (S&P Global Ratings)

“The rating action reflects successful execution of several aspects of CommonSpirit’s initial strategies in stemming losses and setting the system up for stability, as well as a significantly strengthened balance sheet that provides the organization some cushion for operations that we expect to be at near break- even levels in fiscal 2022,” S&P Global Ratings said.

NYU Langone Health (New York City) — raised in January from “A3” to “A2” (Moody’s Investors Service)

“The upgrade to ‘A2’ reflects continued extensive growth initiatives and expense controls which will continue to translate into robust margins and significant cash flow that will provide a cushion for anticipated large capital spend over the next several years,” Moody’s said.

Saint Peter’s University Hospital (New Brunswick, NJ) — raised in April from “Ba1” to “Baa3” (Moody’s Investors Service)

“The upgrade to Baa3 reflects our view that Saint Peter’s University Hospital will sustain material improvement in margins driven by substantial net benefits (estimated at $26 million annually) under the County Option Hospital Fee Pilot program, additional funding under the state charity care program, and more favorable payor contracts,” Moody’s said.

Temple University Health System (Philadelphia) — raised in December 2021 from “BB+” to “BBB” (Fitch Ratings)

“The two-notch upgrade to ‘BBB’ on Temple’s IDR and revenue bond rating is based on improved profitability in the most recent two fiscal years, and more significantly, the material increase in TUHS’s liquidity metrics resulting from the sale of its interest in Health Partners, which yielded approximately $300 million,” the credit rating agency said. “The upgrade to an investment-grade rating level is driven by the vastly improved financial profile metrics.”


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