The downgrade on New Jersey Health Care Facilities Finance Authority's bonds, issued for Capital Health System, reflects significant operating losses in fiscal 1997 and through November 1998 (unaudited 11-month interims) and the failure of Capital Health System to achieve cost savings and other efficiencies as projected. Capital Health represents the 1997 merger of Helene Fuld and Mercer Hospitals in New Jersey. At the time of the merger, there were planned clinical and ancillary service consolidations slated for the two Trenton-based hospitals. To date, few of these efficiencies have been implemented. In addition, operating losses have severely weakened expected debt service coverage and have diminished days cash on hand. Capital Health's days cash on hand has fallen to less than 100
