The ratings on the debt issued for Catholic Healthcare West (CHW), Calif. are affirmed based on: Improved, although still negative, operating performance through the third quarter, ended March 31, 2000 (unaudited); Increased debt service coverage and stable liquidity due largely to very strong investment income for the interim period; and Indications that CHW's turnaround plan, while generally underway, still shows operating losses that are larger than expected and fundamentally inconsistent with the current rating. Ongoing operational and financial hurdles could continue to erode CHW's credit quality and include an expected variance from budget in the fourth quarter, which could result in worse-than-expected results for the fiscal year. Standard&Poor's is scheduled to meet with CHW in October to discuss
