Fitch Places Novant Health on Rating Watch Evolving

Business Wire, April 1, 2008

LONDON & CHICAGO -- Fitch Ratings has placed Novant Health's (Novant) long-term underlying 'AA-' rating on Rating Watch Evolving, affecting approximately $757 million of North Carolina Medical Care Commission health care revenue bonds issued on behalf of Novant. Fitch's action follows Novant's announcement today of its investment in seven hospitals owned by Health Management Associates, Inc. (HMA; Issuer Default Rating of 'B ' by Fitch).

Novant has agreed to purchase a 27% interest in seven North and South Carolina hospitals owned and operated by HMA, Inc. for $300 million in cash. The hospitals are strategically distributed throughout Novant's service areas and range in size from 70 to 125 beds. As part of the transaction, Novant will employ a total of 119 clinic-based physicians and mid-level practitioners associated with the hospitals.

The rating is under review pending Fitch's analysis of the transaction details and Novant's recently released audited financial statements. Based on a preliminary review of the transaction's terms and associated projections, Fitch believes the likelihood of a rating change is low, and were the rating to be changed, it would likely move no more than one notch in either direction. Fitch expects to complete its review of Novant's rating and the effect of the transaction in the next few weeks.

Novant's current 'AA-' rating is supported by its strong financial profile, solid market position and extensive physician network. Primary credit concerns include Novant's sizeable capital plans and expansion projects and the presence of a strong competitor in the Mecklenburg County area. For more information on Novant's rating see Fitch's Aug. 13, 2007 press release and the Nov. 8, 2006 report, both of which can be found on the Fitch web site at www.fitchratings.com.

Novant is a regional integrated delivery system with eight hospitals (1,989 licensed beds), anchored by Forsyth Medical Center in Winston-Salem (805 licensed beds) and Presbyterian Hospital in Charlotte (531 licensed beds). Novant's corporate headquarters are located in Winston-Salem, NC, with facilities located throughout central North Carolina (Triad region), south-central North Carolina (Southern Piedmont region), and the southeastern coastal region of North Carolina. In fiscal 2006, Novant had total operating revenues of $1.94 billion.

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.