NEW YORK - Moody's Investors Service has upgraded New York University Hospitals Center's (NYUHC or the Center) debt rating to A3 from Baa1.
This action affects approximately $510.3 million of rated bonds issued through the Dormitory Authority of the State of New York. The rating outlook is stable at the higher rating level.
Moody's also upgraded the rating assigned to the Series 2000D bonds to A3 from Baa2. Due to an internal administrative error, this Series of bonds was inadvertently omitted from the rating action taken on 12/17/2010, when NYUHC's parity obligations were upgraded to Baa1 from Baa2. Today's two notch upgrade reflects both a correction to the missed rating action on 12/17/2010 (to Baa1 from Baa2), as well as today's rating action (to A3 from Baa1).
The rating upgrade to A3 follows the center's sustained operating momentum that has translated into substantial operating cash flow, and growth of cash and investments.
The A3 rating is also well supported by NYUHC's profile as a large and growing academic medical center as well as its continued close relationship and integration with Aa3-rated New York University (NYU or University) and its School of Medicine.
The outlook revision to stable from positive at the higher rating level reflects Moody's belief that NYUHC will continue to generate favorable operating margins and maintain liquidity to help the hospital absorb significant capital spending plans which are expected to be funded by cash-flow and new money debt borrowings.