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MOODY'S: ST. LUKE'S HEALTH SYSTEM'S BOND RATING UPGRADED; FINANCIAL PERFORMANCE IMPROVED, DEBT SERVICE RESERVE FUND REPLENISHED

 NEW YORK, March 2 /PRNewswire/ -- St. Luke's Health System in Phoenix experienced a substantial drop in financial performance from 1988-1990, Moody's Investors Service said today.
 In 1990 the system failed to make debt service payments requiring the trustee to draw upon the debt service reserve funds to meet bondholder payments on the Series 1985A bonds. As a result of these problems, the rating on the Series 1985A bonds was suspended in October 1989 and later lowered to "Caa" in May 1990.
 Since that time the system has re-established a trend of improved, although still limited financial performance after a period of unsuccessful diversification efforts, declining utilization and poor liquidity. As a result of this improved performance, the rating is revised from "Caa" to "Ba." While financial performance has improved significantly in the past two years, continuing credit concern derives from an extremely competitive market and significant managed care penetration, and the system's still limited historical financial performance. In addition the debt position remains high with only moderate coverage.
 -0- 3/2/93
 /CONTACT: Ellen Gordon, assistant vice president, health care ratings, of Moody's, 212-553-4118/


CO: St. Luke's Health System ST: Arizona IN: HEA SU: RTG

TS-CK -- NY072 -- 1959 03/02/93 12:37 EST
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Publication:PR Newswire
Date:Mar 2, 1993
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