Moody's Investors Service has affirmed the "Aa3" rating assigned to $24.4 million of series 2012 fixed rate revenue refunding bonds issued to Fort Worth, Texas-based Tarrant County Hospital District and revised the outlook on the bonds to stable from negative.
The rating affirmation and the outlook revision were based on TCHD's improved operating performance, good balance sheet measures, low debt load and favorable leverage measures.
TCHD's operating cash flow margins have improved over the last three years to 7.6 percent, compared to its cash flow margins in fiscal years 2009 through 2011, which averaged 3.6 percent.
TCHD anticipates receiving between $21 million and $25 million in additional supplemental funding under the 1115 Medicaid waiver program, which allows states to receive federal matching funds and increase funding for public hospital that provide a disproportionate share of uncompensated care and Medicaid services. The waiver program is approved until December 2016.
The health network's liquidity position has also grown. As of June 30, TCHD had $483 million or 229 days cash on hand.
TCHD also faces some challenges, such as 92 percent of its gross revenues coming from government health programs and self-pay patients.
More articles on hospital credit ratings:
Moody's affirms Mercy Hospital's 'A3' rating
6 recent hospital rating and outlook changes, affirmations
Fitch affirms Alexian Brothers Health System's 'A-' rating