Moody's Investors Service has assigned 'A2' ratings to Columbia, Md.-based MedStar Health's $255.91 million of series 2015 fixed rate refunding bonds and to $103 million of series 2015 fixed rate taxable bonds.
Moody's also affirmed the 'A2' ratings on MedStar's outstanding debt.
The assignment and affirmation was supported by a number of factors, including the system's formidable market position, continued improvement in operating margins and strengthened balance sheet position, according to Moody's.
The system also faces some challenges, which were considered for the assignment and affirmation, such as "an increasingly competitive and consolidating healthcare market, moderate margins compared with similarly-rated peers, and expected increases in capital spending which includes additional leverage with this financing," according to Moody's.
The system has a positive outlook, which is based on the system's "improved operating performance and balance sheet measures since 2009, when the System's rating was upgraded to the 'A2' level."
If the system can sustain its operating performance and balance sheet measures at current levels while it incurs additional debt, Moody's expects to upgrade the rating within the next 12 to 18 months.
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