Moody’s Investors Service affirmed Agnesian Health Care’s A3 rating while revising its outlook to positive from stable in recognition of its favorable operating margins.

The action affects $77.8 million of rated debt issued through the Wisconsin Health and Educational Facilities Authority.

The rating reflects Agnesian’s leading market position over a broad service area around Fond du Lac, profitable operations, and improved and favorable cash position.

“The outlook revision to positive from stable reflects our expectation that Agnesian will continue to demonstrate favorable operating margins, although not necessarily as strong as fiscal year fiscal 2011, and maintain good liquidity ratios,” Moody’s wrote.

The rating agency also said it expects that the system’s volume trends will continue to stabilize and will eventually rebound.

The system’s challenges include plans to add approximately $25 million of new-money debt in the next 18 months.

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