Moody's Investors Service has upgraded Paterson, N.J.-based St. Joseph's Healthcare System's bond rating to "Baa3" from "Ba1."
The rating upgrade affects $231.1 million of outstanding debt issued by the New Jersey Health Care Facilities Finance Authority.
The rating upgrade was supported by a number of factors, including the system's improved operating performance. SJHS's operating cash flow margins have improved from 9 percent in 2012 to 13.6 percent through nine months of fiscal year 2014.
The rating upgrade was also supported by the system's leading market share. SJHS has a 35 percent market share, which is the leading share in its service area.
SJHS faces some challenges, which were considered for the rating upgrade, such as having a leveraged balance sheet. As of Sept. 30, the system had cash-to-direct debt of 83 percent.
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