Moody's affirms Lafayette General Medical Center's 'A3' rating

Moody's Investors Service has affirmed the "A3" bond rating on $81.6 million of Lafayette (La.) General Medical Center's outstanding debt.

Moody's analysis was based on consolidated financial statements of Lafayette (La.) General Health System, which includes 311-bed LGMC, University Hospital and Clinics in Lafayette, La., Acadia General Hospital in Crowley, La., and St. Martin Hospital in Breaux Bridge, La., as well as a 10-bed surgical hospital and an investment group. 

The rating affirmation was supported by a number of factors, including LGHS's volume growth and improving operating performance. The system has a multi-year trend of improving operating performance, which peaked in fiscal year 2013 with an operating cash flow margin of 12.1 percent.

The rating affirmation was also supported by the health system's leading market share. Its market share has grown from 30 percent in its primary service area in 2010 to 39 percent in 2013.

The health system also faces some challenges, which were considered for the rating affirmation, such as its unrestricted cash and investments over the last several years not keeping pace with its growth in expenses and increased debt load.

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