Moody's Investors Service said it has upgraded to Baa2 from Ba1 Touro Infirmary's bond rating on $75.2 million of outstanding bonds issued through Louisiana Public Facilities Authority.
The outlook is stable.
The rating upgrade and stable outlook are attributable to operating improvement and a marked strengthening of the balance sheet across the past 2.5 years, which has occurred since the affiliation with Louisiana Children's Medical Center and Children's Hospital in 2009.
The addition of new physicians, strengthening of the service array, and enhancement of the residency programs have resulted in volume and revenue growth with further revenue enhancement through the receipt of upper payment limit (UPL) funds.
Unrestricted cash and investments grew despite the redemption of certain outstanding bonds, with remaining bonds all fixed rate. These strengths are offset by the continued risk of loss of UPL funding, a competitive healthcare market, and unknown demands by the parent to support affiliates.