Moody’s Investors Service revised its outlook on Fairview Health Services’ A3 rating to stable from negative in recognition of its improved operations.

The action impacts $824 million of rated debt issued through Minneapolis and the Minnesota Agricultural and Economic Development Board.

“The affirmation of the A3 rating reflects the much improved financial performance and growth in liquidity in fiscal year 2012 following a downturn in performance and liquidity in fiscal 2011 when the system installed a new electronic medical record system,” Moody’s wrote. The revised outlook recognizes a continuation of the positive trends.

The rating is further supported by Fairview’s strong reputation as the academic medical center for the University of Minnesota and favorable market position as the number two provider in the Twin Cities metro area, and its advanced care model that will assist Fairview in better managing patient populations and managing risk.

The system’s challenges include balance sheet measures that are relatively weak compared to the A3 medians and a negative public response this past spring to a proposed merger with Sanford Health. The Minnesota attorney general launched public hearings after it was disclosed Fairview was considering a merger with Sanford which then withdrew from negotiations.

Fairview operates six hospitals most of which are in Minneapolis and Twin Cities suburbs.

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