For the first time in five years, Standard & Poor's upgraded more not-for-profit healthcare borrowers than it downgraded in two consecutive quarters.
The ratings agency upgraded 15 issues for not-for-profit acute-care providers, representing $5.3 billion in debt, and downgraded eight, for $640 million in debt, between April and June. Stronger performance, revenue growth and cost containment contributed heavily to the improved credit ratings.
Upgrades affected both small and large providers with weak and strong credit. However, six second-quarter downgrades already held speculative ratings.
"A good number of providers, primarily at the lower end of the credit spectrum, are still not able to benefit from what is generally a positive credit climate," S&P said.
The overall strong performance of not-for-profit healthcare ratings may continue through year-end, the agency said.