Moody's Investors Service upgraded the rating on Barnabas Health, N.J., to Baa1 from Baa2, and revised the outlook to stable from positive.
The action affects $899.5 million in pro forma-rated debt outstanding of New Jersey's largest integrated health care delivery system.
"The Baa1 rating and stable outlook reflect the continued and pronounced turnaround at Barnabas under the direction of new financial leadership and a reinvigorated senior management team," analysts said in a report.
Moody's noted that performance has improved through the first nine months of fiscal year 2012, following a strong year in 2011.
"The improved credit position is offset by a sizeable amount of indirect debt, including operating leases and an underfunded pension, and continued declines in inpatient volumes system-wide," analysts said.