Penn State Health maintains strong credit ratings from Moody’s and S&P Global Ratings
Penn State Health has received strong validation of its financial strength and strategic direction from two of the nation’s leading credit rating agencies.
Moody’s Ratings affirmed the health system’s A3 credit rating and upgraded its outlook from Stable to Positive, and S&P Global Ratings affirmed its A rating with a Stable Outlook for Penn State Health’s new Series 2026 bond issuance and outstanding rated debt.
The ratings support Penn State Health’s planned 2026 financing, which will fund strategic investments in technology modernization, including implementation of the Epic electronic health record, expansion of ambulatory services and other initiatives designed to strengthen access to care and support long-term growth.
“This recognition reflects the significant progress Penn State Health has made in improving financial performance while continuing to invest in our mission,” said Tracy Moyer, executive vice president and chief financial officer, Penn State Health. “The independent assessments from both Moody’s and S&P demonstrate confidence in our strategic direction, operational improvements and ability to serve patients and communities across central Pennsylvania for years to come.”
Both agencies cited Penn State Health’s strong regional market position, growing patient demand, expanding physician network and improved financial performance as key strengths.
Moody’s highlighted the organization’s improved operating results, including a 5% operating cash flow margin (EBIDA) in fiscal year 2026 and 123 days cash on hand, while recognizing Penn State Health’s strong market presence anchored by Penn State Health Milton S. Hershey Medical Center and its affiliation with Penn State.
Similarly, S&P noted significant operational improvement across the enterprise, including stronger performance at Hampden and Lancaster medical centers, continued growth in referrals to Milton S. Hershey Medical Center and Penn State Health Golisano Children’s Hospital, and the value of strategic relationships with Penn State and Highmark.
The agencies also recognized Penn State Health’s strengthened balance sheet and liquidity. S&P reported unrestricted reserves of approximately $1.6 billion, the same 123 days cash on hand figure and improved debt service coverage metrics. Moody’s cited stronger cash reserves and improving operating performance as drivers of its positive outlook.
Since fiscal year 2023, Penn State Health management initiatives have generated approximately $450 million in performance improvement and $150 million in avoided costs, contributing to a significant improvement in operating performance. S&P noted that the organization has improved from an operating loss position in FY23 to near breakeven performance in FY26 under its methodology, and expects continued progress driven by revenue cycle, supply chain and physician integration initiatives.
The Series 2026 financing will support approximately $225 million in information technology modernization and ambulatory growth initiatives and reimburse approximately $90 million in previously funded capital expenditures, while maintaining debt metrics consistent with current rating levels.
Moody’s positive outlook reflects its expectation that Penn State Health will continue strengthening its financial position while executing strategic investments. S&P’s stable outlook reflects confidence that the health system will maintain balance sheet stability and continue its trajectory of operational improvement despite ongoing reimbursement and cost pressures facing healthcare organizations nationwide.
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