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Moody’s sets Trinity bond rating at A3 stable

August 28, 2011
From staff reports , The Herald-Star

STEUBENVILLE - Moody's Investor Service Inc. has affirmed Trinity Health System's bond rating at A3 with a stable outlook.

Trinity officials note the positive rating occurred while most of the nation's nonprofit hospitals who are receiving ratings are realizing a reduction in their rating.

Bond ratings are a means by which investors who are interested in buying an organization's debt can determine the organization's financial strength. The stronger an organization is perceived to be, the lower the interest rate the organization has to pay to borrow money.

Trinity noted its rating is one of the highest in the local region when compared with other local institutions.

Moody's said despite the challenges Trinity Health System faces in weak demographics, with high unemployment, an aging population, a declining population and a high dependence on government - Medicare and Medicaid - payers, there are several factors in its favor including:

Trinity has maintained a leading market share.

Trinity has improved operating financial performance for each of the last three years.

Trinity has shown steady growth in cash and investments.

Trinity has a stable and tenured management that has deployed proven strategies to grow revenue and reduce costs.

Trinity has a modest debt load with fixed interest rates.

Fred Brower, president and chief executive officer of Trinity Health System, said, "Our retention of the A3 rating is the result of the hard work of our entire Trinity team. Our ability to manage our costs and cash, while at the same time capturing new revenue sources, has taken the hard work of many. Although we have had some success, our job isn't finished. As Moody's indicated, we will need to continue to improve operations, grow business and manage costs in order to counteract the reimbursement reductions expected to be implemented by Medicare and Medicaid."

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