Moody's Investors Service affirmed the "Baa1" rating on Buffalo, N.Y.-based Catholic Health System, affecting $98 million of debt.
The affirmation is a result of several factors, including the health system's strong market position, relationship with a large physician group, sufficient liquidity and conservative direct leverage. Moody's also acknowledged challenges for CHS, including its competitive market, demographic challenges, hefty pension obligation and high counterparty risk.
The outlook was revised to negative from stable due to CHS' continuously weak operating cash flow margins and inability to sustain cash flow improvements as outpatient competition increases.