Moody's ratings changes could raise healthcare credit ratings

Moody's Investors Services has announced that it plans to adopt a revised rating scale for municipal bonds, which could raise healthcare credit ratings by an average of one notch. The agency plans to convert healthcare and education bonds to its new global ratings scale in November, a move that should affect more than 400 not-for-profit hospitals and health systems. Not only will higher ratings improve the perception of hospitals' health, they may even give beleaguered institutions with otherwise strong credit a new ability to borrow and make new capital investments.

Since the early 1900s, Moody's has rated muni bonds separately from corporate bonds. However, the practice has brought criticism from regulators, including Connecticut's attorney general. The Connecticut AG's office announced in July that it had filed a lawsuit alleging that not only Moody's, but also major ratings firms Fitch and Standard & Poor's were issuing artificially low credit ratings for municipal bonds.

To learn more about the proposed change:
- read this Modern Healthcare article

Related Articles:
Case study: NJ hospital refinances bond debt
MA bond authorities make transactions easier
With donations, Sutter bonds get final approval

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.