Moody’s Investors Service raised its rating by one notch to A1 on CentraCare Health System’s debt due to the Minnesota-based system’s strong financial performance.
The action affects $370 million of outstanding debt.
The upgrade reflects “continued strong financial performance that exceeds Moody’s A1 medians, material improvement in liquidity balances over the past several years, management’s efforts to decrease risk in the hospital’s debt and capital structure, completion of a new patient tower, and market dominance in CentraCare’s service area,” analysts wrote.
The system benefits from $430 million in unrestricted cash and investments and saw an 11.2% operating cash-flow margin in fiscal 2012. It’s the dominant provider in a 12-county region between Duluth and Fargo, N.D. The system is challenged by its leverage position as well as a sizeable swap collateral posting of $59 million.