CHICAGO - Moody's Investors Service upgraded Kettering Health Network, an Ohio system that ratings analysts say has seen improving liquidity and operating margins in the last two years.

Moody's boosted the rating to A2 from A3, affecting just under $400 million of revenue bonds. The outlook is stable.

"The upgrade reflects KHN's strong operating margins in fiscal year 2013 and 2014 and significant improvement in liquidity ratios, which have led to improved debt coverage metrics," Moody's said in its ratings report. "While operating margins may moderate from the particularly strong results recorded in fiscal 2014, we expect KHN to continue to generate margins in-line with or better than A2 medians."

Kettering operates eight hospitals around Dayton, including its flagship, Kettering Medical Center.

Moody's downgraded the system to A3 from A2 in May, 2012, saying at the time that its operating performance declined in 2011 and that it faced several challenges, including competition, thin coverage ratios, and significant capital plans.

Standard & Poor's has an A rating on Kettering.

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