Moody’s Investors Service revised to positive from stable its outlook on $87 million of A3-rated debt from Green Bay-based Bellin Memorial Hospital due to improved operating performance.

The hospital sells it bonds through the Green Bay Redevelopment Authority and the Wisconsin Health and Educational Facilities Authority.

The system recorded an 11.3% operating cash-flow margin for fiscal 2009 and a 16.7% margin for the first eight months of fiscal 2010.

“We note that while we expect Bellin to maintain elevated operating performance in line with FY 2009, we do not believe the very strong results generated in interim FY 2010 are sustainable,” Moody’s cautioned.

The credit benefits from the hospital’s broad service area throughout northeastern Wisconsin and the southwestern Upper Peninsula of Michigan. The hospital also has a track record of favorable operating performance in the face of heightened competition,

Its challenges include significant lease commitments and competition from other facilities. The facility is small compared to other similarly rated hospitals with about 8,200 admissions and $322 million of revenue in fiscal 2009.

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