Moody's Investors Service has upgraded to Aa2 and Aa2/VMIG 1 from Aa3 and Aa3/VMIG 1, respectively, the ratings assigned to Christiana Care Health Services' (CCHS) outstanding bonds, issued by the Delaware Health Facilities Authority.
The rating outlook is stable at the higher rating level. The ratings and outlook apply to $253 million of outstanding debt.
The rating upgrade to Aa2 reflects Christiana's history of consistently strong financial performance, strengthened debt coverage measures including measurable reduction of unfunded pension liability, marked growth in liquidity, commanding market position in state, and strong and experienced management team.
These strengths are mitigated by CCHS's more modest cushion of variable rate demand debt supported by own liquidity then similarly rated peers, high level of planned capital spend and a payer mix that consists of 16% Medicaid.
The affirmation of the VMIG 1 short-term ratings on the bonds supported by self liquidity reflects Christiana's ability to provide liquidity for the purchase price of unremarketed bonds on a timely basis. Christiana maintains adequate liquidity that can be liquidated on a daily basis and a sizable investment portfolio of weekly investments.
The stable rating outlook is based on the expectation that Christiana will continue to maintain solid operating performance and a strong market position and balance future capital spending and debt with cash flow and liquidity strength.
