Moody's weighs Cooper Health credit rating boost

Citing "improved financial performance" at Cooper Health System due to "strong volume growth" and its recent deal with Houston-based MD Anderson Cancer Center, Moody's Investors Service is weighing a boost to the hospital network's relatively low Baa3 credit rating, in advance of its expected $130 million bond sale scheduled for around July 15, writes analyst Sarah Vennekotter in a report to clients.

Hospital stays plus admissions are up more than 8% in fiscal 2012, proof of "Cooper's focus on expanding key service lines, successful physician recruitment efforts," and South Jersey dominance, writes Vennekotter. The hospital's cash position has improved to $264 million, or 124 days' expenses, from $197 million, or $88 million, in fiscal 2011.

But South Jersey remains "competitive," especially given its proximity to Philadelphia's university hospitals (Penn, Jefferson, Temple, Drexel), the Moody's report added. Cooper's exposure to Medicaid patients in its poverty-stricken hometown of Camden plus existing debt challenge the system's prospects, Vennekotter added.