Baptist Health upgraded by both Moody's, Fitch Ratings

February 02, 2022

Baptist Health has earned an upgrade from A2 to A1 from Moody's Investor Service.

LOUISVILLE, KENTUCKY (Jan. 28, 2022) – Baptist Health has earned an upgrade from A2 to A1 from Moody’s Investor Service, right on the heels of an upgrade to A+ by Fitch Ratings.

“The upgrades return Baptist Health to the highest ratings ever from either agency,” said Baptist Health CFO Steve Oglesby. “Over the past five years, we successfully executed key strategies and demonstrated our ability to continuously strengthen our financial position and operating cash flows while at the same time expanding access to our healthcare facilities with an ambitious and robust strategic plan.”

Fitch Ratings announced the bond rating upgrade Jan. 7, and Moody’s followed on Jan. 21.  Baptist’s outlook at the higher ratings by both agencies is stable.

“Our efforts to better serve our communities with additional ambulatory care facilities, convenient specialty and retail pharmacy options and innovative digital health services have enhanced our ability to provide high quality patient care and improve patient outcomes,” said Gerard Colman, Baptist Health CEO. “We are pleased to see that the ratings agencies affirmed that Baptist Health is moving in a positive direction and has managed well, even during the pandemic.”

Among the positive points noted by both rating agencies are Baptist Health’s plans to spend on average about $380 million in each of the next four fiscal years to support major projects, including:

  • Baptist Health Hardin - 282,000-square-foot medical pavilion including comprehensive cancer care, surgical suites and physician offices.
  • Baptist Health Lexington -- 129-acre campus at Hamburg that includes an Ambulatory Surgery Center, Emergency Department, Cancer Center, and multi-story physician office complex.
  • Baptist Health Louisville -- 126,800-square-foot outpatient services healthplex on Breckenridge Lane plus an operating room expansion at the hospital.

In granting the upgrade, Moody’s listed some of Baptist Health’s strengths as its status as Kentucky’s largest healthcare system (including its leadership during the COVID-19 pandemic), the durability of improvement supported by revenue growth from expansion and diversification strategies plus IT capabilities, strong cash flow and discipline around capital spending.

In its Fiscal Year 2021 report, released earlier this month, Baptist Health reported rising operating revenue and income, hitting $3.9 billion in operating revenue and $146 million in operating income. The health system inked a 3.8 percent operating margin, up from 3 percent the previous fiscal year.

As outlined in the health system’s annual report, factors contributing to the favorable financial results included hiring additional providers for the Baptist Health Medical Group, growing outpatient services and increased capabilities in neurosurgery, orthopedic surgery and cancer care.  The addition of Baptist Health Hardin, finalized at the start of the fiscal year, also boosted the bottom line.