MPMC’s Bond Rating Significantly Upgraded

12/7/2009

MPMC’s Bond Rating Significantly Upgraded

Fitch Ratings recently completed its annual review of Maria Parham Medical Center’s 2009 financials related to their outstanding 2003 revenue bond issue. Fitch has upgraded the bond rating from BB- to BB+, which represents an increase of two levels. This rating upgrade is a remarkable achievement given a year in which the economy has not been healthy, not-for-profit healthcare bond rating downgrades have outnumbered upgrades and the credit crisis has made rating agencies, lenders, investors and others very conservative in their outlook for the healthcare sector. According to Fitch Ratings, this rating upgrade “reflects Maria Parham’s significant strengthening of its balance sheet over the past three fiscal years, stable operating performance, and sustained market presence. At fiscal year end, Maria Parham had $25 million in unrestricted cash and investments, amounting to 131 days cash on hand. Factors leading to the enhanced operations include effective cost controls for supplies, lower contracted labor usage, and appropriately negotiated managed care plans with commercial carriers.” In addition, Fitch also noted the modern facilities, state of the art technology and effective executive leadership as strengths.

Jim Chatman, CFO of Maria Parham Medical Center, states “While small, rural, independent hospitals have tremendous challenges, the Fitch Ratings review underscores that Maria Parham is doing the right things from an operations, financial, and quality of care perspective. We have our employees, physicians, management team and Board of Directors to thank for this significant achievement during a difficult economy.”