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THE MEDLANTIC HEALTHCARE GROUP (DC) $68 MILLION BONDS 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --

THE MEDLANTIC HEALTHCARE GROUP (DC) $68 MILLION BONDS 'BBB+' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, April 28 /PRNewswire/ -- District of Columbia's $68 million Hospital Revenue Refunding Bonds, Series 1992A (Washington Hospital Center Issue) are rated 'BBB+' by Fitch. The credit trend is improving. Bond proceeds will refinance existing debt.
 The rating reflects the combined strength of the three significant members of the obligated group: Medlantic Healthcare Group (MHG), the National Rehabilitation Hospital (NRH) and Medlantic Enterprises Inc. (MEI). In total, approximately $500 million in annual net revenues is produced.
 MHG operates Washington Hospital Center (WHC). On a combined basis, WHC and NRH dominate the Washington metropolitan area's acute and rehabilitative health care market. Recent financial losses are due primarily to discontinued operations. Board and management changes to correct past problems and inefficiencies were put into place slightly less than two years ago. Fitch expects management to diligently execute its strategic plans established in the early part of 1991. Improving margins over the last 18 months confirm the financial turnaround. If the losses attributable to discontinued operations are excluded from fiscal year 1991's results, MADS historic pro forma debt service coverage of 1.67x is present.
 Concerns exist about margins in core business lines. The large indigent population served by MHG must be prudently managed so as to assure continued financial success. An aggressive capital program to replace aging facilities and add new services has resulted in large amounts of long-term debt. This debt load requires several more years of profitable operations before a stronger and more balanced capital structure emerges.
 -0- 4/28/92
 /CONTACT: Edward C. Merrigan of Fitch, 212-908-0513/ CO: Medlantic Healthcare Group ST: District of Columbia IN: HEA SU: RTG


KD -- NY139 -- 4056 04/28/92 17:32 EDT
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Publication:PR Newswire
Date:Apr 28, 1992
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