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CHARLOTTE/WINSTON-SALEM, NC -- Novant Health, a not-for-profit healthcare system, refinanced $198 million of debt today. The refinancing will save approximately $17 million by taking advantage of lower interest rates.

Were refinancing old debt with new favorable rates, explained Dean Swindle, Chief Financial Officer and President of Ambulatory Services at Novant Health. The old debt includes $53 million of 1996 bonds that range from 5.25% to 5.8% and $145 million in 1998 bonds at approximately 5%. Novant refinanced the combined $198 million at 4%. The average remaining life of the bonds is approximately 10 years. Because Novant is not-for-profit, the refinancing is approved by the North Carolina Medical Care Commission.

We evaluate every opportunity to increase the amount of funds we have available for patient services, new medical technology and community facilities, Swindle emphasized. Were building three new community hospitals and converting to electronic medical records. The savings from this refinancing will help us with these important projects and others. Novant plans to invest $1.6 billion in facilities and medical technologies over the next five years.

As part of the refinancing process, Novant Health leaders updated the three national rating agencies on the health systems major priorities around patient care, facility expansion and operations. The rating agencies Fitch, Moodys and Standard & Poors predict the impact of a companys strategic direction and performance on the holders of bonds. Novant and other organizations pay the rating agencies to conduct the evaluations.

Fitch reaffirmed Novants strong AA- rating with a stable outlook, which Swindle estimates would place the health system in the top 10% nationwide. Fitchs published report stated that its rating is based upon Novants sustained profitability leading to a strong financial profile, solid market position, extensive physician network, integrated delivery platform and its history of successful integration of acquisitions.

Moodys also reaffirmed Novants Aa3 rating, which is equivalent to other agencies AA-, with a negative outlook. Moodys published report highlighted that Novant is under the direction of seasoned management and has experienced eight consecutive years of improving absolute levels of operating cash flow. Moodys also determined that Novant might experience integration risks associated with its recent expansion strategies.

Standard & Poors recently published (August 14, 2008) an industry report that predicts growing financial pressures on not-for-profit healthcare systems. That philosophy affected its new rating of Novant, lowering it from AA- to A+ with a stable outlook.

We were not surprised that one of the agencies changed our rating, Swindle said. We felt that could happen in the short term but we remained committed to improving and expanding our organization. Novant is the fastest growing healthcare system in the Carolinas and maybe in the Southeast. We have entered into several very creative partnerships in the last year and some industry experts will view that as innovative and others might associate more risk with them.

Novant acquired the national MedQuest company ten months ago. MedQuest consists of 92 imaging centers, of which two-thirds are located in the immediate five state region of North Carolina, Virginia, South Carolina, Tennessee and Georgia. Novant also entered into a partnership with Health Management Associates and its seven hospitals located in the Carolinas. In addition, Rowan Regional Medical Center in Salisbury joined Novant in January.

All of these new partnerships are having a positive impact on our health system, Swindle explained. And we never lose sight of why finances are important to provide the best patient care possible.

Novant Health consists of a 1,020 physician medical group and nine hospitals in North Carolinas Charlotte, Triad and southeastern regions: Presbyterian Hospital, Presbyterian Orthopaedic Hospital, Presbyterian Hospital Huntersville and Presbyterian Hospital Matthews of the Charlotte area; Rowan Regional Medical Center in Salisbury; Forsyth Medical Center, Medical Park Hospital and Thomasville Medical Center in the Triad region; and Brunswick Community Hospital along the coast. Other facilities and programs of Novant Health include the following: MedQuest imaging centers with 92 locations in 13 states; two nursing homes; outpatient surgery and diagnostic centers; rehabilitation programs; and community health outreach services. Novant Health is ranked 4th nationally among the Top 100 Integrated Healthcare Networks, an analysis conducted by the national Verispan health informatics company.