2009-11-10 22:31:05 -

Fitch Ratings has assigned a 'BBB+' rating to Baptist Health Care Corporation's (Pensacola, FL) (BHCC) $220.5 million series 2009 A-C bonds. The series 2009A bonds are expected to be issued through the Escambia County Health Facilities Authority. The series 2009B and the series 2009C (if issued) are taxable corporate securities and will be issued by Baptist Hospital, Inc. The Rating

Outlook is Stable.

The series 2009 bonds will be issued to refund BHCC's existing indebtedness, fund approximately $45 million of capital expenditures, refinance indebtedness associated with the Physician Office Building (POB) and Andrews Institute and to reimburse BHCC for prior capital expenditures. In addition, bond proceeds will fund a debt service reserve fund (for series 2009A) and approximately 24 months of capitalized interest, and pay the costs of issuance.

The 'BBB+' rating is supported by a long history of financial success in the competitive Pensacola, Florida market, BHCC's outstanding reputation for quality as evidenced by being a Baldridge Award recipient, BHCC's solid market share of approximately 35% and financial metrics that are consistent with the rating category. In addition, the presence of the Andrews Institute at the Gulf Breeze campus will bring name recognition to BHCC that should have a halo effect on the entire organization. Fitch expects that BHCC's financial performance will remain strong and should reach 2009 levels over the near term. Management's operational improvement strategies were successful in FY2009 and should be sustainable for the next few years. BHCC's financial performance improved significantly in 2009 due to solid revenue growth, good expense control management and improved revenue cycle management.

Fitch's credit concerns include the competitive nature of the service area along with a slightly weak liquidity position for the rating level.

Fitch believes that the competitive landscape in the market is likely to stay consistent over the medium to long term and that Baptist should enjoy favorable utilization trends over the next several years. While liquidity is weak for the rating, management believes that its operation improvement plan should result in improved liquidity over the next several years.

The Stable Outlook is based on Fitch's expectation that BHCC will maintain an operating profile that is more in line with FY2009 performance and continue to grow its cash position. Failure to maintain these levels could result in rating pressure.

Additional information is available at ' www.fitchratings.com : '.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS : .

IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE ' WWW.FITCHRATINGS.COM : '.

PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch RatingsJim Mitchell, 813-222-1395, TampaCarolyn Tain,
212-908-0259, New YorkorMedia Relations:Cindy Stoller,
212-908-0526, New YorkEmail: cindy.stoller@fitchratings.com : mailto:cindy.stoller@fitchratings.com