Fitch Rates Louisiana PFA's $38MM Medical Facility Bonds 'A-'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Nov. 12, 2002

Fitch Ratings assigns 'A-' to the Louisiana Public Facilities Authority's (the Authority) $38 million revenue refunding bonds (medical center of Louisiana at New Orleans-university hospital facility), series 2002. The bonds are expected during the week of Dec. 2 through negotiation with Morgan Keegan & Company, Inc., Banc One Capital Markets, Inc. and Stephens Inc. They will be due Oct. 15, 2003-10 and are subject to extraordinary call at par under certain circumstances involving sale or unreconstructed damage to the facility or taxability of the bonds.

The bonds are special obligations of the Authority, payable from a trust estate primarily derived from rental payments made by the state of Louisiana. The payments are absolute and unconditional obligations of the state, subject to legislative appropriation. Consequently, security depends on the state, whose own general obligation bonds are rated 'A' by Fitch.

Louisiana in recent years has successfully met many challenges, including dramatic debt reduction, Medicaid reform, pension funding discipline and financial improvement. In addition, substantial reserves have been accumulated. The economy is resource dependent, led by oil and gas and its manufacturing is petroleum based. This leaves the state vulnerable to the volatility inherent in energy reliance.

The new bonds will refund the outstanding portion of the authority's revenue bonds (Louisiana department of health and hospitals medical center of Louisiana at New Orleans project) series 1992. The bonds financed the purchase of the then Hotel Dieu hospital, now part of a larger medical complex. The facility is leased to the state departments of administration and health and hospitals although the complex has been operationally transferred to Louisiana State University. The facilities operate primarily for indigent care and as a teaching institution and as such are important to the state. The department of administration is a part of the office of the governor and has numerous responsibilities including the budget; under the lease, the department covenants to include the rental payments in the budget.