Fitch Ratings Reviews Mount Sinai Medical Center, Florida.

Business Editors

NEW YORK--(BUSINESS WIRE)--Nov. 19, 2002

Mount Sinai Medical Center, FL (MSMC), whose outstanding bonds are rated 'BB' with a Negative Rating Outlook by Fitch Ratings, have reported financial results for the period ending Sept. 30, 2002 (the third quarter) which are on track to meet management's fiscal 2002 budget. A list of outstanding issues is provided below.

MSMC had an operating loss of $36.8 million (negative 11.8%), and a net loss of $30.8 million (negative 11.4%) through the third quarter of 2002. MSMC's budgeted to lose $32.5 million in fiscal 2002 for the entire year before a $30 million transfer from the Mount Sinai Medical Center Foundation (the Foundation) which is currently not reflected in MSMC's operating margin. While MSMC's third quarter results indicated an operating loss near the projected fiscal year end loss of $32.5 million, management asserts that certain initiatives will have their greatest impact in the fourth quarter, allowing MSMC to achieve their stated goals. If MSMC meets its projected goals for fiscal 2002 it will likely avoid a rate covenant violation. MSMC's unrestricted cash position has improved slightly, and it has no plans to issue additional debt over the medium term.

MSMC has exceeded Fitch's expectations for achieving its initiatives related to managed care negotiations and labor initiatives and has made progress towards improving supply chain management and physician contracts. Despite this Fitch will wait to review both the 2002 audited financials (expected in April 2003) and the fiscal year 2003 budget before it re-evaluates MSMC's credit rating. Though MSMC has hit budget through nine months, its losses remain substantial, causing Fitch to maintain its Negative outlook. Further, MSMC's history of inadequate disclosure and its inability to meet budgeted goals remains a clear and recent memory, though MSMC's current disclosure practices under its new management team have included above average quarterly and annual financial reporting to both Fitch and bondholders.

MSMC has also begun consolidation of services at its two campuses. Most noteworthy is the decision to consolidate heart services at the Mount Sinai Medical Center campus. Fitch views management's decision to move forward with consolidation positively as it should create additional cost savings opportunities for the system despite anticipated strain on physician relations that is typical with most consolidations.

MSMC is a two campus health care provider offering a wide range of tertiary services with 979 licensed beds (780 staffed) located in Miami Beach, FL. MSMC has total operating revenue of $436 million in 2001.

Outstanding debt:

--$92,125,000 City of Miami Beach Health Facilities Authority, hospital revenue bonds, series 2001A (Mount Sinai Medical Center of Florida Project);

--$30,430,000 City of Miami Beach Health Facilities Authority, hospital revenue bonds, series 2001B (Mount Sinai Medical Center of Florida Project);

--$70,640,000 City of Miami Beach Health Facilities Authority, hospital revenue bonds, series 2001C (Mount Sinai Medical Center of Florida Project);

--$98,000,000 City of Miami Beach Health Facilities Authority, hospital revenue bonds, series 1998 (Mount Sinai Medical Center of Florida Project).