Erlanger Receives Credit Rating Upgrades From Standard & Poor’s Global, Fitch And Moody's

  • Thursday, August 1, 2024

Erlanger has received a series of credit rating upgrades from three leading rating agencies: Standard & Poor’s Global Ratings, Fitch Ratings and Moody's Ratings. These upgrades reflect Erlanger's "strong financial performance over an extended period of time, successful strategic initiatives, leading market share in a growing service area, and commitment to providing exceptional healthcare to Chattanooga and surrounding communities," said officials.

Jim Coleman, president and CEO of Erlanger, expressed his pride in Erlanger’s accomplishments, "These rating upgrades are a clear validation of our unwavering commitment to financial health and delivering exceptional patient care. By executing a robust performance management plan, we have positioned ourselves for a strong future. We are committed to providing care through the highest level of services to our patients and community while maintaining our financial health to support our mission.” 

S&P has assigned Erlanger an 'A' long-term rating credit, citing the organization’s robust operating performance, leading market share, as well as attention to strategic growth initiatives. The upgrade reflects S&P's confidence in Erlanger's ability to maintain financial stability and meet its long-term strategic goals, which include a long-term master facility plan, said officials. 

S&P also highlighted last year’s conversion from a public hospital to a private 501c3, noting that the conversion has been well executed and positions Erlanger for future success.

Fitch Ratings has elevated Erlanger's credit rating from 'BBB+' to 'A-', with a positive outlook highlighting effective management practices, highly consistent operational performance and a steadily improving balance sheet. This upgrade is a testament to Erlanger's proactive approach to financial management and its dedication to delivering high-quality healthcare services, said officials.

Fitch also highlighted Erlanger’s leading market share which is approximately double that of its two local competitors. This achievement is in a region that is growing demographically, economically stable, and widely dispersed across primary and secondary markets.

Moody's Ratings has upgraded Erlanger's credit rating from 'Baa2' to 'Baa1', with a positive outlook. Moody's recognized Erlanger's strengthened operating performance and the resulting growth in unrestricted cash and investments which underscores the improving financial strategy and risk management. Moody’s also noted Erlanger’s strategic growth focused on access, growing market position and service area essentiality. Moody’s highlighted Erlanger’s stronger financial profile, strategic investments in facilities and technology, and its commitment to community health. The positive outlook indicates the potential for further upgrades.

Lynn DeJaco, chief financial officer, added, "Erlanger’s leadership team has strengthened the overall operating platform, despite the industry headwinds, leading to consistently high operational and financial performance and growth in liquidity. These ratings reflect this hard work and execution of strategic initiatives by the Erlanger team.  It’s a clear indication that we are well-positioned to continue this positive trajectory and enhance our ability to serve the diverse needs of our growing community.”

For more information about Erlanger, visit erlanger.org.

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