Fitch Publishes Non-Rated Descriptive Report on Villa St. Benedict, IL.

Business Editors

NEW YORK--(BUSINESS WIRE)--Nov. 18, 2003

Fitch Ratings has released its non-rated descriptive report on the approximately $75.5 million Illinois Health Facilities Authority revenue bonds (Villa St. Benedict Project) series 2003A through series 2003C.

Fitch's descriptive credit report provides analysis of significant credit factors and includes Fitch's evaluation of the strengths and risks surrounding this credit. No request was made for a rating on this transaction, and Fitch did not review all information or complete all procedures necessary to reach a final credit rating. Generally, Fitch regards unenhanced debt issued with financial characteristics similar to the described facility as being below investment grade.

With this financing, a start up continuing care retirement community, Villa St. Benedict, will be constructed on 27 acres of the Sacred Heart Monastery campus, which currently has 32 existing assisted living units. The project will be co-sponsored by the Benedictine Sisters of the Sacred Heart (BSSH) and Benedictine Health System (BHS). Fitch views the oversight and investment of the sponsoring members as one of the project's main credit strengths.

BSSH and BHS have funded the initial capital for the project and will be involved in the governance and management of the facility. In addition, BHS has extensive experience in long term care, with approximately 50% of its health system's revenue from long term care entities. The project has generated significant interest and presales as of Oct. 28, 2003 was very strong at 80%. Service area characteristics are favorable including a significant Catholic population and affluent wealth indicators.

The main credit concerns are typical for a start up CCRC project and include fill up and construction delays. Fill up of the independent living units as forecasted is essential to meeting projected financial targets at stabilized occupancy. The market is fairly competitive with 12 CCRCs and 6 stand alone assisted living facilities. Assisted living competition is more of a concern as the market occupancy is in the mid-80s. The project will have an initial high debt burden with 18% unrestricted cash to debt and MADS as 27.4% of total revenue at stabilized occupancy. However, this is characteristic of a start up and coverage is projected to be adequate at 1.32x in fiscal 2008.

Villa St. Benedict is a start-up, Type B continuing care retirement community that will consist of 197 independent living units (141 apartments, 56 duplex/fourplex units), and 65 assisted living units (32 units already exist).

For a copy of the credit analysis, please visit Fitch's web site at 'www.fitchratings.com' or contact Market Services at [phone].