Baptist Hospital, Fla., Upgraded to A3 by Moody's

Moody's Investors Service said it has upgraded to A3 from Baa1 the rating assigned to Baptist Hospital, Inc. and, The Baptist Manor's Inc., Fla., bonds issued by the Escambia County Health Facilities Authority.

The rating outlook is stable at the higher rating level.

The primary driver of the upgrade is operating momentum that is expected to continue and result in further strengthening of liquidity.

The upgrade to A3 follows Baptist's ability to generate improved profitability over a multi-year period, grow unrestricted cash and investments, and strengthen an already leading market position in its primary service area.

The rating is tempered by a competitive environment, with two other large providers that are part of well-funded national systems, and higher than average leverage at the A3 rating level which is exacerbated by comprehensive liabilities.

The rating outlook is stable at the higher rating level reflecting our expectation that this level of profitability is sustainable, Baptist will at least meet budgeted expectations for FYE 2014 and momentum will contribute to further balance sheet strengthening in coming years.

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