Fitch Rates BayCare Health System (Florida) Revs 'AA-'; Outlook Stable

NEW YORK--(Business Wire)--
Fitch Ratings has assigned an 'AA-' underlying rating on the expected issuance
of approximately $200 million of Pinellas County Health Facilities Authority's
(Florida) health system revenue bonds series 2009A-1, A-2, and A-3 on behalf of
BayCare Health System (BayCare). The bonds are expected to be issued as
variable-rate demand bonds backed by three irrevocable direct pay letters of
credit (LOC) with:

--Bank of America (rated 'A+/F1+' by Fitch) providing $75 million;

--Northern Trust (rated 'AA-/F1+' by Fitch) providing $75 million;

--Wachovia Bank (rated 'AA/F1+' by Fitch) providing $50 million.

Fitch also affirms the underlying 'AA-' rating on BayCare's outstanding parity
debt. Total long-term debt after issuance will be approximately $815 million.
Fitch expects to assign a long-term rating based on the bank bonds closer to the
time of sale. The Rating Outlook is Stable.

Proceeds from the series 2009 bonds will be used to refund approximately $154
million of outstanding series 2006A auction-rate bonds, provide approximately
$40 million to terminate a floating- to fixed-rate swap on the 2006 bonds, and
cover the costs of issuance. BayCare plans to enter into a new floating- to
fixed-rate swap for the current 2009 bond issuance. Maximum annual debt service
(MADS) is expected to be $55.3 million (MADS provided by Morgan Stanley), and
unaudited 2008 results show BayCare covering MADS at 5.4 times (x), which is
strong for the 'AA' category.

The 'AA-' rating reflects BayCare's leading market position in the Tampa,
Florida region, solid operating performance, and good liquidity. BayCare
maintains a leading inpatient market share of 36.2% in the tri-county region of
Hillsborough, Pinellas, and Pasco counties, which is further supported by a
network of primary care physicians and outpatient centers. Unaudited Dec. 31,
2008 year end results show that BayCare recorded $100.2 million in operating
income (operating margin of 4.8%), and both its operating EBITDA (13.4%) and
EBITDA (14.1%) margins are strong for Fitch's 'AA' category. The unaudited year
end results also show BayCare's liquidity remaining solid with 214.8 days cash
on hand. BayCare's total cash and unrestricted investments are approximately $1
billion, in spite of $367 million in unrealized losses as of year end Dec. 31,
2008.

Credit concerns include the competitive local health care market and BayCare's
ongoing capital needs. Tampa remains very competitive with BayCare competing
against several large for-profit and not-for-profit hospital systems. The
for-profit hospital company, HCA has nine hospitals in the region and maintains
the leading market share in Pasco County. To maintain its competitiveness,
BayCare's management continues to make capital investments across its hospital
system; recent capital projects include the building of a new 76-bed hospital,
St. Joseph's North Hospital, in Hillsborough County. (For a more in-depth
analysis of BayCare, see Fitch's Oct. 10, 2008 credit update report which can be
found on Fitch's web site at www.fitchratings.com.)

BayCare has two other floating- to fixed-rate swaps outstanding, which have a
notional value of $154.4 million. The swaps are insured, and there are no
collateral posting requirements as long the insurance remains in place. The mark
to market value of these swaps as of Jan. 1, 2009 was negative $45 million.

The Stable Rating Outlook reflects Fitch's belief that BayCare will continue to
benefit from its strong market position, sustaining current operating and
liquidity levels, which, in turn, will enable the health system to make the
capital investments necessary to remain competitive.

Operating in the Tampa Bay region of Florida, BayCare is a large health care
system that consists of seven hospitals with a total 2,677 licensed beds, 2,215
of which are currently in operation, and a long-term care facility with 163
beds. Unaudited 2008 results show that BayCare had total revenues of $2.1
billion. BayCare covenants to provide annual audited financial statements and
quarterly financial disclosure (including balance sheet, income statement, cash
flow statements, and operating statistics). Disclosure material is made
available on DAC www.dac-ey.com, which Fitch views favorably.

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
Gary Sokolow, +1-212-908-9186 (New York)
Jim Mitchell, +1-813-222-1395 (Tampa)
Media Relations
Cindy Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com

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