Fitch Rates OhioHealth's (Ohio) $187MM VRDBs 'AA'; Affirms outstanding; Outlook Stable

NEW YORK--(Business Wire)--
Fitch Ratings has assigned an 'AA' to the approximately $186.7
million 2008A County of Franklin, Ohio variable-rate demand revenue
bonds (VRDBs) OhioHealth Corporation (OhioHealth). Fitch also affirms
at 'AA' its underlying rating on approximately $400 million of
outstanding County of Franklin, Ohio revenue bonds issued on behalf of
OhioHealth. The Rating Outlook is Stable.

Proceeds from the 2008A bonds will be used to refund the
outstanding 2003A and 2003B auction-rate securities issued by County
of Franklin, Ohio (OhioHealth). The 2008A bonds will be issued as
variable-rate demand bonds in the weekly mode. The bonds are expected
to be backed by a stand-by bond purchase agreement from JP Morgan
Chase, NA. The bonds are expected to receive a short-term rating based
on the bank's credit strength upon closing of the sale which is
scheduled to take place via negotiation the week of July 28th.

The assignment and affirmation of the 'AA' and Stable Rating
Outlook are supported by OhioHealth's continued strong operating
performance, its leading market position in the competitive Columbus
market, strong balance sheet measures, and sound management practices.
OhioHealth's operating performance continues to be buoyed by its
stable and leading inpatient market position resulting in strong
inpatient and outpatient utilization. This coupled with an
organization wide focus on matching costs with activity resulted in
OhioHealth posting very strong operating margins ranging from
3.9%-6.0% from fiscal 2004-2007, and 7.6% through the third quarter of
fiscal 2008 ending March 31, 2008. Furthermore, OhioHealth's
management has done a quality job in converting these strong
operations into cash, with cash flow margins between 11.9% and 14.4%
over the same period with 12.0% through the third quarter fiscal 2008,
all above Fitch 'AA' median of 10.0%. Cash from these strong
operations have to strengthen its balance sheet with pro forma MADS
coverage from EBITDA a strong 5.5 times (x) through the third quarter
FY08, in line with Fitch's 'AA' median of 5.6x. At March 31, 2008,
OhioHealth's $1.07 billion of unrestricted cash equaled 267 days cash
on hand and 174% cash to debt, both stronger than the 'AA' category
medians of 237.4 days and 153.9%, respectively.

The Stable Rating Outlook reflects Fitch's belief that
OhioHealth's strong financial performance will continue over the
medium term sustained by its leading market position and its strategic
growth initiatives especially its physician alignment efforts.
Moreover, Fitch believes OhioHealth's strong demonstration of
management competence in matching costs to activity provides a solid
base from which sustained profitability can be achieved. Furthermore,
Fitch views the overall demographic characteristics of the Columbus
market favorably (Columbus, Ohio General Obligation bonds rated 'AAA'
by Fitch). Finally, Fitch continues to view OhioHealth's strategic
investments in growing suburban markets favorably and views favorably
the successful opening of the new Dublin Methodist Hospital in January
2008.

The primary credit concern is the growing number of uninsured
patients treated at OhioHealth (self pay growing to 8% of revenues in
FY07 from 6% in FY05) that could place pressure on its profit margin.
Additional concerns include the competitive landscape for medical
services in greater Columbus and OhioHealth's plans to issue further
debt. Both the inpatient market and outpatient markets remain
competitive as two strong providers provide like inpatient services
and entrepreneurial physicians remain a competitive force for
ancillary and non-inpatient modalities. Finally, OhioHealth may issue
additional debt in fiscal 2009, principally to reimburse costs
associated with its strategic growth initiatives that have been funded
from cash. Fitch will review the final details of any planned
additional indebtedness at the time of issuance.

OhioHealth is a 16-hospital system based in Columbus, OH.
OhioHealth had $1.7 billion in total revenue in fiscal 2007.
OhioHealth covenants to provide bondholders an annual audit within 180
days of fiscal year-end and quarterly disclosure within 60 days of
quarter end via the NRMSIRs. Quarterly disclosure includes a balance
sheet, consolidated and consolidating income statement, statement of
cash flows, utilization statistics, and a management and discussion
analysis.

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.

Fitch Ratings
Anthony A. Houston, +1-312-368-3180 (Chicago)
Carolyn Tain, +1-212-908-0259 (New York)
Sandro Scenga, +1-212-908-0278
(Media Relations, New York)

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