Moody's Investors Service has assigned a "Baa1" rating to $103 million of series 2015 fixed rate revenue refunding bonds to be issued on behalf of Wenatchee, Wash.-based Central Washington Health Services Association, which does business as Central Washington Hospital.
At the same time, Moody's upgraded CWH's parity debt to "Baa1" from "Baa2" and revised the hospital's outlook to stable from positive.
The upgrade to "Baa1" was based on CWH's third year of strong operating performance, improved debt measures, and the successful execution of the agreement with Wenatchee Valley Medical Center to form Wenatchee-based Confluence Health. The upgrade was also supported by "essentiality in the market place, good physician relations, and very high market share," according to Moody's.
CWH also faces challenges, such as balance sheet pressures at the parent level as the merger led to increased revenues and expenses but not much additional working capital.
Moody's said the outlook revision at the higher rating level reflects its belief that performance measures will remain strong at CWH and will remain somewhat pressured in the near future at Confluence Health.
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