Moody's Investors Service has assigned a "Baa2" rating to Chattanooga, Tenn.-based Erlanger Health System's $148.4 million of series 2014A fixed rate revenue bonds, affirmed the "Baa2" rating on the system's outstanding bonds, and revised the system’s outlook to stable from negative.
The rating assignment was supported by a number of factors, including the system's wide regional draw with unique services, location in an economically strong region and improved operations under a new CEO and president.
The rating assignment was also supported by Erlanger's current refinancing which has improved peak debt coverage despite a growth in absolute debt load.
Erlanger also faces a number of challenges, which were considered for the rating assignment, such as its modest balance sheet and operation in a particularly competitive healthcare market.