Moody’s Investors Service has upgraded to Aa2 and Aa2/VMIG 1 from Aa3 and Aa3/VMIG 1, respectively, the debt ratings assigned to Christiana Care Health Services’ bonds, issued by the Delaware Health Facilities Authority.
The rating outlook is stable at the higher rating level. The ratings and outlook apply to $253 million of outstanding debt.
The rating upgrade to Aa2 reflects Christiana’s history of consistently strong financial performance, strengthened debt coverage measures including measurable reduction of unfunded pension liability, marked growth in liquidity, commanding market position in state, and strong and experienced management team, the ratings service stated. On the minus side, Moody’s cited the system’s “more modest cushion of variable rate demand debt.” supported by own liquidity then similarly rated peers, high level of planned capital spend and a payer mix that consists of 16 percent Medicaid.
The stable rating outlook is based on the expectation that Christiana will continue to maintain solid operating performance and a strong market position and balance future capital spending and debt with cash flow and liquidity strength, Moody’s stated.
