Moody’s upgrades Mercy Medical Center’s outlook to stable

Moody’s Investors Service has affirmed Cedar Rapids, Iowa-based Mercy Medical Center’s “A2” rating, affecting approximately $115 million of rated revenue bonds issued through the Iowa Finance Authority and city of Cedar Rapids.

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MMC represents approximately 91 percent of MSC assets and 87 percent of MSC operating revenue.

The rating affirmation was supported by a number of factors, including MSC’s “good liquidity ratios, sound market position in a favorable service area, track-record of good operating results, and adequate debt coverage ratios even during weaker years,” according to Moody’s.

Moody’s said MMC continues to face notable competition in Cedar Rapids and is showing improvement after weaker results in fiscal years 2013 and 2014.

The outlook revision reflects MSC’s significant operating improvement in interim fiscal year 2015, as well as Moody’s expectation that “operating margins in full year FY 2015 and FY 2016 will exceed FY 2013 and FY 2014 results by a significant margin.” The stable outlook was also supported by MSC’s favorable liquidity position.

 

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