Standard & Poor's Corp. revised the ratings outlook for Massachusetts General and Brigham and Women's Hospitals last Friday to positive from stable.
The ratings agency said the two hospitals' improved revision was a result of the announcement last week of a plan to merge.
Brigham and Women's Hospital is rated A-plus and Massachusetts General is rated A. Massachusetts General's taxable bond rating is currently A-minus.
The hospitals are two of the largest teaching affiliates in the Harvard University medical school system.
Standard & Poor's said the hospitals' previous stable outlook was due to the fact that both were relatively strong institutions faced with adapting to new health care conditions.
The merger will allow the two hospitals to pool their resources, staffs, and facilities instead of competing against one another for business.
The boards of directors of the two hospitals said the decision to merge was made because of expected changes in the health care industry under President Clinton.
At a press conference last week, J. Robert Buchanan, president and chief executive officer of Brigham and Women's, said that through the merger the two hospitals hope to cut 20%, or $240 million, from their combined $1.2 billion operating budget.
Buchanan said this should be possible without making any staff reductions.
The proposed merger still has to be approved by Massachusetts Attorney General L. Scott Harshbarger. Officials at both hospitals said they would like the merger to begin as soon as possible.