Moody’s Investors Service last week upgraded HealthPartners Inc.’s rating to A3 from Baa1, citing a track record of profitability with improved performance in fiscal 2008 and 2009.

The action affects $286 million of outstanding debt issued through the St. Paul Housing and Redevelopment Authority and Minneapolis.

The system’s strengths include its large size, including health care plans, Regions Hospital, two small rural hospitals, and a growing multi-specialty physician group with more than 700 members.

The expansion of the tertiary Regions facility, which saw more than 24,000 admissions in fiscal 2009, is also on time and on budget.

The system has a modest debt load that is all structured in fixed-rate mode. Revenues provide 7.5 times debt service coverage.

HealthPartners is planning a manageable $77 million in capital spending between fiscal 2010 and 2012. About 70% of its operating revenue comes from its concentration in health care plans.

The health care system faces a competitive operating environment, and Medicaid represents a high 18.5% of hospital gross revenues.

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