Fitch Rates Mid-Florida Medical Services 'BBB' Underlying.

TAMPA -- Fitch Ratings has assigned a 'BBB' underlying rating to the Mid-Florida Medical Services' (MFMS) Polk County Industrial Development Authority revenue bonds (Winter Haven Hospital Project) as follows:

-- $30 million, series 2005A;

-- $30 million series 2005B.

The bonds are expected to be insured by Radian Asset Assurance, whose insurer financial strength is rated 'AA' by Fitch. The series 2005 bonds will refund the Series 1985 bonds and fund the construction of an open heart center, renovation of operating rooms and the exterior of the hospital, upgrading of several existing systems in the hospital, and pay costs of issuance. The series 2005 bonds are expected to be auction-rate securities and are anticipated to be issued through negotiation by Merrill Lynch and SunTrust the week of March 14, 2005. Shattuck Hammond Partners served as the financial advisor. The Rating Outlook is Stable.

The 'BBB' rating reflects Mid-Florida Medical Services' (MFMS) improved operating profitability, sound debt service coverage, and leading market share position. MFMS is located in Winter Haven, FL, approximately 52 miles east of Tampa and 47 miles west of Orlando. Winter Haven is geographically isolated from the major roadway connecting Tampa and Orlando (I-4), which makes travel outside the service area difficult. MFMS' financial performance has improved over the past several years with the hospital posting net incomes in excess of $5 million in each of the past two years. The recent financial performance has resulted in solid coverage of pro forma debt service of approximately 3.5 times (x) in each of the past two years. Mid-Florida has sold off non-core assets over the past several years including Lake Wales Medical Center and Good Shepherd Hospice of Mid-Florida, Inc. The sale of these non-core assets has contributed to a marked increase in liquidity from $16.9 million at September 30, 2003 (36.1 days' cash on hand) to approximately $52.3 million at Dec. 31, 2004 (103.9 days' cash on hand). Fitch believes that MFMS is well positioned in its service area and should benefit considerably from the addition of the open heart program at Winter Haven Hospital. In addition, due to the open heart program coming on board, MFMS was able to contract with a large physician group, the Watson Clinic, which should lead to enhanced volume and market share.

Fitch's main credit concerns include the hospital's medical staff composition and reliance on three large physician groups, high days in accounts receivable, high bad debt levels, and light liquidity relative to expenses. In addition, the project to be financed with the series 2005 bonds involves considerable construction, and risks associated with the project will be inherent over the near term. Fitch believes that the addition of the open heart program should greatly enhance the hospital's position in the market and enable MFMS to solidify its position as the leading provider of medical care in the eastern part of Polk County.

Located in Winter Haven, Florida, MFMS operates a 466-licensed bed hospital (Winter Haven Hospital), a 61-licensed bed hospital (Regency Medical Center), and several family health centers located throughout eastern Polk County. In fiscal year 2004 (unaudited), MFMS had total operating revenue of approximately $205 million. MFMS has covenanted to provide to bondholders annual audited financial statements, in addition to disclosure of quarterly financial statements.