Moody's Investors Service has assigned an "A3" rating to Boston-based CareGroup's proposed $231 million of Series I bonds, to be issued by the Massachusetts Development Finance Agency. Moody's has also affirmed its "A3" rating on $517 million of rated debt.
The rating assignment and affirmation were based on several factors, including CareGroup's large size, as well as its growing patient volumes and market share.
The rating also takes into account the organization's relatively low leverage position and front loaded debt schedule that has contributed to a declining debt burden over the last several years, according to Moody's.
Key credit challenges include CareGroup's status as a confederate model with varying degrees of integration among the member hospitals, modest operating performance, and the likelihood of increased capital spending in coming years.
The outlook is stable, reflecting Moody's expectation that CareGroup "will continue to generate modest operating surpluses and improve performance over weaker 2015 levels."
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