Moody's revises Fairview Health Services' outlook to positive

Moody's Investors Service has affirmed the "A3" bond rating assigned to approximately $827 million of Minneapolis-based Fairview Health Services' bonds and revised the health system's outlook to positive from stable.

The rating affirmation was based on a number of factors, including Fairview's improved financial performance, growth in liquidity, and strong market position.

The health system's operating cash flow margin was 8.6 percent in fiscal year 2013, up from 8 percent in 2012, and 5.2 percent in 2011. In addition, Fairview's unrestricted cash and investments grew to $1.3 billion in fiscal year 2013, up from $1.1 billion in 2012.

Fairview also faces some challenges, such as its located in a very competitive market with several other large systems. In addition, the health system continues to experience a decline in inpatient volumes.

The revision of the rating outlook reflects the system's improved financial performance through the first six months of fiscal year 2014, which is the third consecutive year Fairview has shown improved results.

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