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MASS HEFA (SAINTS MEM MED CTR) $74.4 MIL BONDS 'BBB-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 10 -- /PRNewswire/ -- The Massachusetts Health and Educational Facilities Authority's $74.4 million revenue bonds series A, issued for Saints Memorial Medical Center, are rated "BBB-" by Fitch. The bonds are expected to sell through negotiation by the First Boston Corp. during the week of Sept. 13. The credit trend is stable.
 Bond proceeds primarily will be used to refund outstanding indebtedness of the medical center. In addition, approximately $7.8 million will be used to help finance a construction project and renovation program. A debt service reserve fund will be established.
 Saints Memorial Medical Center is licensed to operate 350 beds on two campuses in Lowell, Mass. The medical center was created as the result of a merger between St. John's and St. Joseph's hospitals, effective Oct. 1, 1992. For periods prior to the merger, statistics are on a combined basis for St. John's and St. Joseph's hospitals.
 The rating is supported by the merger economies realized to date, strong medical staff support of the merger, and continued development of a primary-care physician network. Management acted swiftly once the merger took effect, consolidating certain services and departments, resulting in significant personnel reductions. On an pro forma basis, assuming merger had occurred at the beginning of 1992, the medical center has 2.3 times (x) maximum annual debt service (MADS) coverage. After eight months of fiscal 1993, pro rated MADS coverage is 1.8x.
 Concerns include a limited liquidity position relative to a high amount of debt. Days cash on hand is only 40 days. While balance sheet debt ratios are high, MADS as a percent of revenues is a moderate 5.8 percent. Year-to-date operating and bottom-line losses can be attributed to one-time merger costs as well as the recent loss of three obstetricians. In addition, market share declined from 1988- 1991, although the medical center remains the largest provider in the service area with a 36 percent share.
 Management challenges include the successful completion of the consolidation of services between the two campuses, further personnel reductions, and continued physician recruitment, including obstetricians and primary care physicians to enhance market share and utilization.
 -0- 9/10/93
 /CONTACT: Michele Cebron of Fitch, 212-908-0591/


CO: Massachusetts Health and Educational Facilities Authority ST: Massachusetts IN: HEA SU: RTG

LG -- NY058 -- 0839 09/10/93 15:22 EDT
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Publication:PR Newswire
Date:Sep 10, 1993
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