NEW YORK - Moody's Investors Service said it has placed the Baa1 rating assigned to Lowell General Hospital, Mass.'s debt on review for possible downgrade.

The action is due to the recent execution of a merger affiliation agreement between Lowell-based Saints Memorial Medical Center (Caa1/on review for upgrade) and Lowell General Hospital.

If the transaction finalizes, the merger would likely result in Saints' outstanding debt (approximately $45 million) becoming secured by revenues from a merged obligated group that would include both Lowell General Hospital and Saints.

This would mark a material increase in debt for Lowell General Hospital, as well as present the hospital with operating risks and weak financial performance experienced by Saints in recent years (-7.9% operating margin in FY 2011).
Moody's placed the Caa1 rating assigned to Saints Memorial Medical Center's debt on review for possible upgrade.

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