Moody’s upgrades Universal Health

Moody's Investors Service said it upgraded the corporate family and probability of default ratings of Universal Health Services, Inc. to Ba1 and Ba1-PD from Ba2 and Ba2-PD, respectively.

The agency also upgraded the ratings on the company's senior secured debt to Ba1 (LGD 3) from Ba2 (LGD 3) and senior unsecured debt to Ba2 (LGD 6) from B1 (LGD 6).

The outlook was changed to stable from positive.

United Health’s speculative grade liquidity rating was also upgraded to SGL-1 reflecting the expectation that the company will maintain very good liquidity over the next 12 to 18 months.

"The upgrade of Universal Health's rating to Ba1 reflects our expectation that the company will maintain moderate financial leverage, and in fact maintain some of the most conservative credit metrics among for-profit hospital operators," Moody's senior vice president Dean Diaz said in a news release.

"Universal Health's credit metrics will continue to benefit from strong margins and growth in the fragmented behavioral health segment as well as the positive impact from the Affordable Care Act and improving conditions in certain markets that will enhance the operating results of the company's acute care hospital business."

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