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HEALTHEAST (MINN.) SERIES 1993 A, B BONDS RATED 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, March 8 /PRNewswire/ -- HealthEast's proposed $119.9 million Series 1993 A and B Bonds, issued by the Housing and Redevelopment Authority of the City of Saint Paul, Minn., are rated BBB' by Fitch. The credit trend is stable. The bonds are expected to be priced through negotiation by Merrill Lynch & Co., in the next two weeks.
 HealthEast's outstanding parity debt consists of a 1987 issue ($136.6 million) which is rated BBB' by Fitch and a 1992 issue ($27.5 million) not rated by Fitch, which is secured by a bank letter of credit.
 Bond proceeds of the $107 million A issue will be utilized to refund on Nov. 1, 1997 (crossover date), the outstanding series 1987-A, 1987-C and 1987-D bonds. Debt service savings will be approximately $850,000 annually. The $12 million series B issue will reimburse the system for prior capital expenditures.
 HealthEast and a number of controlled affiliates provide acute, tertiary, long-term care and other health related services. The obligated group for the series 1993 bonds consists of HealthEast, seven other non-profit corporations, and one for-profit corporation.
 The rating reflects the positive results of a major downsizing of corporate staff, streamlining the governance structure, adopting productivity targets and a focused managed care strategy.
 Over the past three audit years, the obligated group has generated operating margins of 2.5 percent, 4.5 percent and 4.0 percent respectively with substantially improved debt service coverage and an improving liquidity position.
 Concerns include a significant debt load, the managed care environment of the Twin Cities, and non-obligated entities which require financial support from the obligated group.
 -0- 3/8/93
 /CONTACT: Frederic J. Martucci of Fitch, 212-908-0554/


CO: HealthEast ST: Minnesota IN: HEA SU: RTG

WB -- NY049 -- 3990 03/08/93 11:58 EST
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Date:Mar 8, 1993
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