NEW YORK - Moody's Investors Service said it has upgraded to Baa1 from Baa2 the long-term and underlying ratings assigned to the bonds of Wheaton Franciscan Services (WFS), Wis., which does business as Wheaton Franciscan Healthcare (WFH).
The bonds were issued by the Wisconsin Health and Educational Facilities Authority. The rating outlook is stable at the higher rating level. The rating action affects the $742.5 million of outstanding debt.
The upgrade to Baa1 from Baa2 reflects multiyear trend of financial strengthening, including expectations that FY 2012 will be another solid year, Wheaton's more manageable debt level that now carries relatively low risks related to debt structure, and its stronger balance sheet, which is characterized by a conservative investment allocation that is highly liquid.
The improved credit position is offset by challenges that include operating in an increasingly competitive market, a high and rising Medicaid load, translating new strategies into enterprise growth as measured by revenues and continuing to evolve newly defined market and clinical strategies with a tighter footprint.
The stable rating outlook reflects our belief that Wheaton will sustain or improve upon current levels of operating performance, maintain liquidity balances, and continue to focus on cost reduction and strategic revenue growth initiatives.