Moody's affirms Centra Health's 'A2' rating

Moody's Investors Service has affirmed the "A2" bond rating assigned to Lynchburg, Va.-based Centra Health's $154.8 million of outstanding rated revenue bonds issued by the Lynchburg Industrial Development Authority.

The affirmation of the rating was based on Centra's strong market position, as it is the sole provider in its primary service area. Centra has a 90 percent market share in Lynchburg. In addition, the healthcare system's operating margins have remained strong, and Centra reported a 10.2 percent operating cash-flow margin for the first six months of 2014. 

Centra is also facing some challenges, such as a payer mix that is comprised of 77 percent government and self pay patients. In addition, the health system's unrestricted liquidity has slightly declined this year due to a number of factors, including the acquisition of Bedford (Va.) Memorial Hospital for $12 million. Over the next five years, Centra will make an estimated $11 to $12 million in capital investments in Bedford Hospital.

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