The rating on Northern Hospital District of Surry County, N.C.'s bonds is based on: A stable balance sheet, combined with profitable operations over the past two fiscal years; Improved debt-service coverage on a pro forma basis after this refinancing; and A good business position in Surry County as the leading acute- and secondary-care provider. The weaker aspects of the district include: Declines in inpatient volumes; Continued vulnerability regarding physician departure; and Competition from large tertiary providers about 40 miles away, in Winston-Salem. The proceeds will refund the district's series 1991 revenue refunding bonds. Surry County Hospital has posted profitable operations over the past two fiscal years, with average operating income of $938,000 (a 2% margin) and average excess income of
