The rating on North Carolina Medical Care Commission's bonds, issued on behalf of Grace Hospital reflects: A sound balance sheet highlighted by excellent liquidity equaling 160% of pro forma debt, A leading market position that should improve with the recent signing of a joint venture with its main local competitor that includes income sharing, and Significant growth in its still modestly sized medical staff. The recent financial performance of the hospital and its subsidiaries' taken together reflects many current industry pressures. Operating income has slipped significantly during 1999, reflecting losses at physician subsidiaries and pressures from the Balanced Budget Act (BBA). However, this concern is tempered by recent management actions to cut costs and raise profitability in 2000. Security for
