Moody's Investors Service has affirmed Detroit-based Henry Ford Health System's "A3" bond rating and revised the system's outlook to stable from negative.
Here are five things to know about the rating action and outlook revision.
1. The rating action affects approximately $670 million of rated bonds outstanding.
2. The rating is supported by a number of factors, including Henry Ford Health System's sizeable and fully integrated healthcare operations with acute-care hospitals, a number of ambulatory locations in the Detroit metro area, a provider-owned health plan, a sizeable employed group physician practice and a national clinical reputation, according to Moody's.
3. The rating is also supported by the system's low debt burden.
4. Henry Ford Health System also faces some challenges, which were considered for the rating action, such as a track record of thin operating cash flow margins, relatively modest liquidity ratios for the rating category, high degree of competition in the Detroit area and modest demographic characteristics in the city of Detroit.
5. The outlook revision reflects the system's improved operating results in fiscal year 2014 and Moody's expectation "that near-term operating margins should continue the stabilizing trajectory evidenced through the first quarter of fiscal year 2015."
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