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MOODY'S COMPLETES REVIEW OF HOSPITAL RATINGS IN NORTH CAROLINA: 3 DOWNGRADES, 18 CONFIRMATIONS

    MOODY'S COMPLETES REVIEW OF HOSPITAL RATINGS IN NORTH CAROLINA:
                 3 DOWNGRADES, 18 CONFIRMATIONS
    NEW YORK, Jan. 13 /PRNewswire/ -- Effective today, Moody's Investors Service announced the completion of its review of hospital revenue bonds in North Carolina.  The review of 21 separate hospital bond ratings resulted in three downgrades and 18 confirmations.  These results reflect the stability of the healthcare industry in the state which can be attributed to an unregulated reimbursement environment and an economy, which while not escaping the current recession, is generally favorable.  One hospital, Alamance Memorial Hospital, remains under review pending the sale of additional bonds.
    The most significant component of the rating distribution in North Carolina is that there are five hospitals with Aa rated indebtedness comprising 24 percent of the ratings as compared to 6 percent nationally.  Compared to the other states, North Carolina has the largest number of Aa rated healthcare institutions in the nation.  The remainder of the ratings is generally consistent with the national distribution with the exception of the A rating.  This rating category accounts for only 19 percent of ratings in North Carolina as compared to 38 percent nationally.  The reason for this lies primarily in the types of hospitals Moody's has rated, which include a disproportionate number of large tertiary and small rural facilities.  In fact, many of the insured ratings, which are not included in this distribution, are mid- sized hospitals.  To illustrate this point, 43 percent of Moody's rated hospitals maintain under 125 beds and 33 percent maintain over 500 beds.
    The three downgrades were primarily a result of inherent vulnerabilities associated with small bed size and limited operating flexibility.  Two of the hospitals -- Cape Fear Memorial Hospital in Wilmington and Chowan County Hospital in Edenton were downgraded to the below investment grade rating of Ba1.  In the case of Cape Fear Memorial Hospital, the hospital has demonstrated strong operating margins but has extremely limited liquidity and is incurring significant additional debt.  On the other hand, while Chowan County Hospital's financial performance has been stable, the relative size of the institution and small number of admissions were major considerations in the rating revision.
    A special report, which will include a summary of the individual findings on each hospital as well as an overview of issues affecting healthcare in North Carolina, is expected to be published within the next few weeks.
    HOSPITAL DOWNGRADES:
    Cape Fear Memorial Hospital
    CITY
    Wilmington
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    2,665
    RATING
    Ba1 (revised A)
    Chowan County Hospital
    CITY
    Edenton
    ISSUER
    Chowan County
    DEBT ($000)
    5,080
    RATING
    Ba1 (revised Baa)
    Morehead Memorial Hospital
    CITY
    Eden
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    5,185
    RATING
    Baa1 (revised from A)
    HOSPITAL CONFIRMATIONS:
    Annie Penn Memorial Hospital
    CITY
    Reidsville
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    12,635
    RATING
    Baa
    Carolina Medicorp Inc.
    CITY
    Winston Salem
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    98,624
    RATING
    Aa
    Charlotte-Mecklenberg Hospital Authority
    CITY
    Charlotte
    ISSUER
    Charlotte-Mecklenberg Hospital Authority
    DEBT ($000)
    139,173
    RATING
    Aa
    Community General Hospital of Thomasville
    CITY
    Thomasville
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    6,985
    RATING
    Baa
    Duke University Hospital
    CITY
    Durham
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    125,585
    RATING
    Aa
    Gaston Memorial Hospital
    CITY
    Gastonia
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    43,028
    RATING
    A
    Grace Hospital
    CITY
    Morganton
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    22,390
    RATING
    A
    Lexington Memorial Hospital
    CITY
    Lexington
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    5,170
    RATING
    Baa1
    Memorial Mission Hospital
    CITY
    Asheville
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    41,887
    RATING
    A1
    Moore Memorial Hospital
    CITY
    Pinehurst
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    6,729
    RATING
    A
    North Carolina Baptist Hospitals
    CITY
    Winston-Salem
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    89,989
    RATING
    Aa
    Northern Hospital of Surry County
    CITY
    Mt. Airy
    ISSUER
    Northern Hospital District of Surry County
    DEBT ($000)
    16,795
    RATING
    Baa
    Pitt County Memorial Hospital
    CITY
    Greenville
    ISSUER
    Pitt County
    DEBT ($000)
    58,900
    RATING
    A1
    Presbyterian Hospital
    CITY
    Charlotte
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    102,354
    RATING
    Aa
    Rex Hospital
    CITY
    Raleigh
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    21,494
    RATING
    A
    Scotland Memorial Hospital
    CITY
    Laurinburg
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    13,319
    RATING
    Baa
    Stanly Memorial Hospital
    CITY
    Albemarle
    ISSUER
    North Carolina Medical Care Commission
    DEBT ($000)
    14,520
    RATING
    Baa1
    University of North Carolina Hospitals
    CITY
    Chapel Hill
    ISSUER
    University of North Carolina
    DEBT ($000)
    59,993
    RATING
    A1
    -0-        1/13/92
    /CONTACT:  Diana Lee, 212-553-4747, Christine Ballantyne, 212-553-7764, or Peter Schwartzman, 212-553-7814, all of Moody's/ CO: ST:  North Carolina IN:  HEA SU:  RTG FC-KW -- NY060 -- 9168 01/13/92 15:18 EST
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Date:Jan 13, 1992
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