Recent credit reports indicate that the merger between Hackensack (N.J.) University Medical Center and Meridian Health System in Wall Township, N.J., strengthened both institutions financially, according to NorthJersey.com.
Standard & Poor Global Ratings raised Hackensack University Medical Center's credit rating from an "A-" to an "A+" and raised Meridian Health's from an "A" to an "A+," stating that the outlook for both was stable.
Moody's Investors Service also upgraded HUMC's rating, giving it a positive outlook.
The ratings increases from both agencies signal that both health systems are considered low credit risks. The systems opted not to combine their debt in the merger.
The individual systems' improved ratings will help determine a potentially lower interest rate should the new system decide to borrow money for capital projects, according to the report.
Hackensack Meridian officials have outlined nearly $2.3 billion in capital spending over the next five years, according to S&P.
Officials are reportedly discussing whether Woodbridge, N.J.-based Hackensack Meridian Health should undergo a capital debt restructuring that would consolidate both systems' debt, which would determine how future borrowing is structured.
According to Moody's Investors Service, the systems' financial performance have improved due to their cost reduction efforts, ability to treat more patients, good arrangements with insurers and Tier 1 status with Horizon Blue Cross Blue Shield of New Jersey's Omnia plan.