Fitch Maintains Rating Watch Evolving on Saints Medical Center (MA) Rev Bonds

Fitch Ratings has maintained the Rating Watch Evolving on the following bonds issued on behalf of the Saints Medical Center (Saints):

--$42.1 million Massachusetts Health and Educational Facilities Authority revenue bonds, series 1993A.

SECURITY

A lien on gross receipts, and there is a debt service reserve fund.

KEY RATING DRIVERS

ACQUISITION NEARING FINALIZATION: With last week's approval from the Vatican, Lowell General Hospital (LGH) has received all necessary approvals to move forward in its acquisition of Saints. The final acquisition agreement is expected to be executed on July 1, 2012.

RATING WATCH EVOLVING MAINTAINED: Maintenance of the Rating Watch reflects the uncertainty surrounding Saints' debt until the final terms of the acquisition are made public and the disposition of Saints' debt clarified. Public disclosure documents indicate that LGH intends to bring Saints' debt into the LGH obligated group. Fitch does not rate LGH.

POSITIVE OPERATING RESULTS CONTINUE: Saints has a positive operating margin (including one-time expenses related to the potential merger) of 3.2% through the first eight months of fiscal 2012 (year-end Sept. 30), a material improvement year over year. Saints' liquidity remains precariously low with just 12.5 days cash on hand. However, an additional $8 million in investments (about 20 days cash on hand) sits at the system level.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Revenue-Supported Rating Criteria', June 12, 2012;

--'Nonprofit Hospitals and Health Systems Rating Criteria', Aug. 12, 2011.

Applicable Criteria and Related Research:

Revenue-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681015

Nonprofit Hospitals and Health Systems Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648836

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Contacts:

Fitch Ratings
Elizabeth Fogerty, [phone]
Media Relations, New York
[e-mail]
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Primary Analyst:
Gary Sokolow, [phone]
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Fitch, Inc.
One State Street Plaza
New York, NY 10014
or
Secondary Analyst:
Michael Burger, [phone]
Director
or
Committee Chairperson:
Eva Thein, [phone]
Senior Director