Florida's Hialeah Hospital, an investment-grade credit when it sold $62 million of bonds two years ago, was slashed to CCC last week by Standard & Poor's Corp. after hospital officials raided the debt service reserve fund.

Hialeah's income statements for the past three years seemed to indicate gathering financial strength, earning the facility's bonds a BBB in 1989, explained Arrick, a rating officer at Standard & Poor's. "But behind the income statements, their fund balance continued to erode and the credit was being undermined," he said.

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