Moody’s Investors Service has revised its outlook to positive from stable on the University of Wisconsin Hospitals and Clinics’ A1 rating due to its improved fiscal performance.

The action affects $64 million of rated debt. The rating is supported by UWHC’s renowned clinical reputation and unique role as Wisconsin’s only academic medical center, its strong market position and solid financial profile.

The improved outlook is due to “a trend of improving financial performance that we expect will continue, bolstering certain key financial metrics to levels more in line with Aa3 norms,” Moody’s said.

The system benefits from strong clinical demand, growth in admissions and two years of improved operations. Cash flow increased to $114 million in 2010 from $57 million in 2008 and unrestricted cash and investments of $500 million provided 190 days cash on hand at the end of March, up from 137 days in 2008.

Its challenges include a competitive local market and debt issuance plans of up to $150 million next year to support a $450 million six-year capital program.

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