Moody's Investors Service has assigned an "A1" rating to Traverse City, Mich.-based Munson Healthcare's $55.5 million of proposed series 2014A, B, and C fixed rate revenue bonds and affirmed the "A1" rating on the system's parity revenue bonds.
The rating assignment and affirmation was supported by a number of factors, including the system's dominant market share over a large service area, stable operating performance, manageable capital spending plans and good pro forma debt coverage ratios.
Munson also faces a number of challenges, which were considered for the rating assignment, such as its challenging payer mix, with Medicare making up 55 percent of the system's gross revenues. Additional challenges include Munson's underfunded pension plan and suppressed liquidity.