Fitch Ratings has upgraded the rating on revenue bonds issued on behalf of Palo Alto, Calif.-based Stanford Hospital & Clinics from "AA-" to "AA" and revised the hospital's outlook to stable from positive.
The upgrade in Stanford Hospital's rating was based on a number of factors, including the hospital's improving operating profitability, strong debt service coverage and growing liquidity. Stanford Hospital's operating margin of 10.3 percent as of Feb. 28 was more than double the "AA" median of 4.2 percent.
Fitch also viewed Stanford Hospital's collaborative relationship with Stanford University and Lucile Packard Children's Hospital, both located in Palo Alto, as a positive credit factor, as Stanford University has an "AAA" rating and the children's hospital is rated "AA."
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