LOS ANGELES - Fitch Ratings upgraded the rating on Central Washington Hospital's revenue bonds to BBB from BBB-minus.
The upgrade affects approximately $112 million of the Washington Health Care Facilities Authority's 2009 revenue bonds, issued on behalf of CWH.
The outlook is stable.
"The rating upgrade is due to CWH's sustained solid financial performance," analysts said in a report released April 29. "CWH had financial difficulties due to a decline in patient volume as well as the opening of its new patient tower in May 2011, but exhibited a financial turnaround in fiscal 2012, which has been sustained in fiscal 2013."
CWH is in Wenatchee, approximately 150 miles east of Seattle.
Improved cash flow has been driven by a rebound in volume as well as a reduction in costs, analysts added. This has led to growth in unrestricted cash and investments and better debt service coverage.
CWH has also benefited from its affiliation with Wenatchee Valley Medical Center, the major multispecialty physician clinic in town. Together the two centers formed Confluence Health, which began operations in January 2013.
WVMC operated a 20-bed hospital and several outpatient clinics, which were transferred to Confluence Health in 2013. The affiliation has resulted in $11 million of annual savings to date, according to Fitch Ratings.
CWH has a dominant market position in the region, with an inpatient market share of over 76%, which has been increasing, analysts said.
Fitch expects the hospital to sustain its improved financial profile and to continue to benefit from its affiliation with WVMC.
