St. Elizabeth Medical Center, Ky., Upgraded to AA by Fitch

Fitch Ratings said it has upgraded to AA from AA-minus the rating on the following bonds issued by the Kentucky Economic Development Finance Authority on behalf of St. Elizabeth Medical Center (SEMC): $93,575,000 fixed rate bonds, series 2009A; $33,700,000 variable rate bonds, series 2009B.

For the series 2009B bonds, this is an underlying rating.

The rating outlook is stable.

The bonds are secured by a revenue pledge of the hospital and a negative mortgage pledge.

The upgrade reflects the consistent, year over year improvement in SEMC's financial profile and performance, which has resulted in financial metrics that well exceed most of Fitch's AA category medians.

SEMC is the sole acute care provider in its primary service area of Northern Kentucky following the acquisition of its only competitor in 2008.

SEMC's profitability in the last three fiscal years has been very good, with operating and operating EBITDA margins averaging 7.6% and 13.9%, respectively. While there was some weakening through the 2013 interim period driven by lower than expected volumes, profitability metrics remain very strong.

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