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Fitch: U.S. Health Care Rating Actions for Six Months Ended June 30, 2006

Posted on: Friday, 7 July 2006, 15:00 CDT

Fitch Ratings has released a special report, 'Health Care Rating Actions for the Six Months Ended June 30, 2006.' Through the six months ended June 30, 2006, Fitch's U.S. Health Care Group assigned ratings to 34 new issues, affirmed 63 ratings, upgraded 14, downgraded nine, and placed nine on Rating Watch. Of the nine downgrades, eight were in acute care and one was in long-term care.

The eight downgrades and 12 upgrades that occurred in the acute care sector resulted in a downgrade-to-upgrade ratio of 0.67:1.0. First half results currently exceed Fitch's expectation that downgrades would continue to exceed upgrades in the acute care sector. The outlook for the acute care sector is currently stable and Fitch expects to provide an update to its 2006 outlook for nonprofit hospitals and health care systems in the upcoming medians report, which is expected to be published in August 2006.

In Fitch's non-acute care portfolio two long-term ratings were upgraded and one was downgraded in the first half of 2006. In addition, seven long-term care ratings were affirmed and two Rating Outlooks were revised to Negative from Stable. Fitch continues to see stability in the continuing care retirement community (CCRC) sector in 2006, supported by strong demand, high occupancy rates and sound management practices; however, downgrades may outpace upgrades in 2006 due to additional debt issuance to fund large expansion projects. In addition, the softening housing market and insurance pressures may weigh on the sector in 2006.

Health care bond issuance during the first half totaled approximately $18.4 billion, which was a slight decrease from the $18.6 billion for the same period in 2005, while the number of issues decreased 9.1% to 321 from 353.

The special report, dated July 7, 2006, can be found on the Fitch Ratings web site at www.fitchratings.com under the header 'Public Finance' and 'Special Reports'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.

Source: Business Wire

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