Moody’s Investors Service Monday upgraded to Baa2 from Baa3 its rating on Mercy Memorial Hospital Corp., reflecting three years of improved performance.
The system has $45 million of outstanding debt.
Mercy Memorial is the only acute-care provider in Monroe County, and enjoys a 65% market share, the ratings agency said.
Other strengths include strong cash flow in fiscal 2012, as well as relatively strong liquidity that translates into 173 days cash-on-hand. The management team has implemented a series of initiatives to improve performance.
Challenges include a growing number of Medicare and Medicaid patients, the state’s own economic challenges, and a growing pension liability.
“The stable outlook reflects stabilization of operating cash flow generation at a higher level more reflective of a Baa2 rating, with the expectation that the decline in performance in FY 2013 is temporary and will rebound in FY 2014,” Moody’s said in the upgrade report.
