Moody's Investors Service said it has upgraded to A2 from A3 the unenhanced rating assigned to Northeast Hospital Authority's (owner of Northeast Medical Center) $19.9 million of outstanding Series 1997 bonds. The outlook remains stable at the higher rating level. The Series 1997 bonds are insured by FSA.
The upgrade in the rating to A2 is based upon the influx of lease revenues derived from various lease agreements signed with recently upgraded A1-rated Memorial Hermann Hospital System (MHHS) with the term of the operating leases running through the maturity date of the outstanding bonds; the level of cash held at the Authority, which now exceeds outstanding debt following a recent partial debt defeasance; and minimal operating expenses at the Authority which Moody's believes will generate sufficient cash flow to cover the existing outstanding debt.MHHS is the Lessee of Northeast Medical Center.
