Moody's Investors Service said it has assigned an A3 rating to UC Health, Ohio's Series 2014 fixed rate bonds, and upgraded the ratings on outstanding debt and the issuer rating to A3 from Baa1.
The rating upgrade reflects a rebound in operating margins in year-to-date fiscal year 2014 to historical levels, following a large temporary hit to performance from the installation of an information system in fiscal year 2013, and strong volume and market share growth.
In addition, a large project and associated debt for the expansion of West Chester Hospital is at least several years away and capital spending is expected to be below operating cashflow levels, preserving current balance sheet strength.
The A3 rating reflects UC Health's prominence as the Cincinnati region's only academic medical center, strong patient demand, and moderate debt level. The system's challenges include operating in a competitive market, a high Medicaid and self-pay patient base, and moderate investment position.
