CHICAGO - Moody's Investors Service revised its outlook for Cedar Rapids, Iowa-based Mercy Medical Center to stable from negative Feb. 24, when it affirmed the medical center's A2 rating on $115 million of revenue bonds issued through the Iowa Finance Authority and the city of Cedar Rapids.

The outlook change reflects "materially improved operating results in interim fiscal year 2015."

The analysis incorporates the financial statements of Mercycare Service Corporation. The medical center represents approximately 91% of MSC assets and 87% of MSC operating revenue. Analysts expect that operating margins for the full year and the next will exceed past results.

The rating is supported by MSC's good liquidity ratios, a sound market position in a favorable service area, a track-record of good operating results, and adequate debt coverage ratios even during weaker years.

"Mercy continues to face notable competition in Cedar Rapids and is only recently showing improvement after weaker results in fiscal 2013 and fiscal 2014," Moody's said.

Moody's and Standard & Poor's both assigned negative outlook to the credit in 2014.

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