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MOODY'S CONFIRMS B RATING ON MICHIGAN HEALTH CARE CORPORATION; CITES EXCEPTIONALLY HIGH DEBT LEVELS, WEAK LOCAL ECONOMY AS CREDIT WEAKNESSES

MOODY'S CONFIRMS B RATING ON MICHIGAN HEALTH CARE CORPORATION; CITES EXCEPTIONALLY HIGH DEBT LEVELS, WEAK LOCAL ECONOMY AS CREDIT WEAKNESSES
 NEW YORK, Feb. 27 /PRNewswire/ -- Effective yesterday, Moody's Investors Service assigned a B rating to the $93,165,000 Hospital Facilities Revenue Refunding Bonds, Series 1991, issued by the Detroit Hospital Finance Authority on behalf of the Michigan Health Care Corporation. At the same time, Moody's confirmed the B rating on the outstanding bonds secured by the corporation's revenue which were issued by the Highland Park Hospital Finance Authority.
 In assigning the ratings Moody's said, "Successive years of excessive operating losses caused by unwise business decisions and unfavorable reimbursement adjustments have significantly strained the corporation's cash position. As a result, the corporation received a "going concern" opinion from its outside independent auditor with respect to its report on the corporation's audit of financial statements for fiscal year 1991.
 A new management team has implemented dramatic changes which, for the first ten months of the current fiscal year, has been translated into significant improvement in financial performance.
 However, this recent improvement is masked by the corporation benefiting from participation in the state's voluntary Medicaid contribution program which is expected to terminate, if not be reduced significantly.
 The Series 1991 bond offering has afforded the corporation the opportunity to restructure a large portion of its outstanding indebtedness. This restructuring has improved the short-term outlook of the organization, by reducing its annual debt service requirements. While this refinancing improves the immediate outlook for the organization its future remains highly speculative due to the tremendously high debt burden.
 Amount of debt outstanding as of March 31, 1991: $156,319,643.
 -0- 2/27/92
 /CONTACT: Dennis M. Farrell, vice president of Moody's Public Finance Department, 212-553-7780/ CO: Michigan Health Care Corporation ST: Michigan IN: HEA SU: RTG


SM-KD -- NY093 -- 3484 02/27/92 17:25 EST
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Publication:PR Newswire
Date:Feb 27, 1992
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