Fitch: 2014 Outlook Stable for U.S. Public Finance

The overall outlook for U.S. public finance in 2014 is stable despite continued fiscal, economic and regulatory uncertainty, according to a new Fitch Ratings report. However, the outlook is negative for two public finance subsectors: U.S. local governments and U.S. nonprofit hospitals and healthcare.

'Although uncertainty around healthcare reform persists, federal budget risk is now reduced,' said Rich Raphael, Managing Director, U.S. Public Finance Group. 'The recently enacted federal budget suggests improvements in resolving recent fiscal stand-offs, which will be beneficial across the board.'

'Failure to raise the debt ceiling ahead of the current Feb. 7 deadline could reduce U.S. growth prospects. Otherwise, strengthening U.S. recovery should support improvements in government revenues generally,' said Olu Sonola, Senior Director and Head of Research in the U.S. Public Finance and Global Infrastructure Groups.

Significant uncertainty associated with the implementation of the Affordable Care Act (ACA) and its impact on the finances of healthcare entities and state governments continues.

While Fitch does not expect the ACA to have a material impact on state credit ratings in the near term, it is likely that hospital providers in states opting out of expanded medical eligibility will be more operationally challenged compared with providers in states participating in the Medicaid expansion.

For more information, a special report titled '2014 US Public Finance Outlook' is available on the Fitch Ratings web site at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: 2014 U.S. Public Finance Outlooks

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=729779

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