Fitch Ratings last week upgraded to BBB from BBB-minus its rating on The Methodist Hospitals, reflecting the northwest Indiana system's improving financial performance.
TMH has $84 million of outstanding long-term bonds.
"The upgrade to BBB from BBB-minus is supported by TMH's healthy operating performance, demonstrating sustained improvements via expense controls and stabilized clinical volumes reflecting good physician recruitment and retention," Fitch analysts said in the ratings report.
TMH operates a 302-bed hospital in Gary and a 333-bed facility in Merrillville. Its fiscal 2011 revenues totaled just under $300 million, according to Fitch.
Future ratings will depend in part on the system's capital plans, analysts said. TMH currently plans to increase capital spending by roughly $30 million a year to finance a master plan.
"While Fitch believes TMH can accommodate increased spending and debt at the BBB rating level, any further upward rating movement will depend upon review of finalized capital and financing plans over the next 12-18 months," the report said.