Moody’s upgrades Mercy Hospital to ‘Ba3’ after sizable debt payment

Moody’s Investors Service upgraded Iowa City, Iowa-based Mercy Hospital to “Ba3” from “B1,” affecting $34 milion of debt. Concurrently, Moody’s revised the hospital’s outlook to positive from negative.

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The upgrade is a result of several factors, most notably the hospital’s comprehensive debt recapitalization and permanent direct debt payment. In addition, the credit agency noted the hospital’s significant financial turnaround. Moody’s unfavorably viewed Mercy Hospital’s small size in a very competitive market.

The outlook revision to positive reflects the significant turnaround Mercy Hospital had in the last fiscal year. Moody’s expects the improvements to continue.

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