A review of Atlanta-area hospital bond ratings by Moody's Investors Service resulted in one downgrade, two upgrades and one confirmation affecting a total of $241 million in debt.
The report is the New York-based credit-rating agency's latest review of unenhanced hospital bond ratings in a state or local market area.
Ratings changes in the Atlanta market "are indicative of the rapidly changing and dynamic" healthcare arena in that area, Moody's said. Continued managed-care penetration is forcing hospitals to re-evaluate their cost structures and operate more efficiently. At the same time, Columbia/HCA Healthcare Corp.'s aggressive move into the market has heightened competition, leading to consolidations, Moody's said.
For example, ratings on Cobb Hospital and Medical Center in Austell and Kennestone Regional Health Care System in Marietta were upgraded to Aa from A because of the two systems' July 1993 merger, which created Northwest Georgia Health System. The upgrades affect a total of $86.2 million in debt.
The rating for Georgia Baptist Health Care System in Atlanta was lowered to Baa1 from A, affecting $135 million in debt. The downgrade reflects a decline in the system's liquidity and profitability, an above-average debt load and competitive concerns, Moody's said.
The A1 rating on Piedmont Hospital in Atlanta was confirmed. The rating covers $19.6 million in debt.
Moody's plans to publish a special report on the Atlanta market.