MOODY'S PLACES SAINTS MEDICAL CENTER'S (MA) Ba3 RATING ON WATCHLIST FOR POTENTIAL DOWNGRADE

Posted on: October 15, 2010, 11:20 am

NEW YORK, Oct 15, 2010 -- Moody's Investors Service has placed the Ba3 rating assigned to Saints Medical Center's (MA) debt on Watchlist for potential downgrade. The Watchlist action is due to the announcement that Covenant Health Systems has decided to end affiliation discussions with Saints. As we discussed in our last report, the ability for Saints to continue making strategic investments is a key factor of our rating analysis, and without an affiliation with Covenant, Saints faces significant challenges in terms of access to capital. Saints is highly leveraged, as evidenced by 42.4% cash to debt, 97.4% debt to capitalization, 16.2 times debt to cash flow as of fiscal yearend (FYE) 2009, and peak annual debt service coverage of 0.89 times, and liquidity balances at our last review were rapidly declining. Unrestricted cash and investments fell to $23.1 million (61 days cash on hand) as of FYE 2009, a 15.4% decline from the prior year amount of $27.3 million (74 days cash on hand). As of March 31, 2010 (6 months of FY 2010), Saints had approximately 44 days cash on hand. Moody's expects to complete the review in the next 90 days...

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