Fitch Ratings assigns Sierra View Local Healthcare District an ‘A’ rating

With an outstanding series 2019 revenue bonds issued to fund the Tulare County skilled nursing facility (SNF) project, an award-winning provider of credit ratings and commentary and research, Fitch Ratings, granted Sierra View Local Healthcare District (Sierra View) with an ‘A’ rating. This rating denotes high credit quality and the capacity for payment of financial commitment is considered strong allowing an approximately $24.2 million of series 2020 refunding revenue bonds to be issued to Sierra View.

“The hospital board recognizes the dedication of our entire healthcare team who have worked tirelessly to achieve a fiscally sound facility,” said Sierra View Medical Center Board of Directors Chair, Rakesh Jindal, MD. “With a combination of a strong financial profile and the hospital’s entire healthcare team’s readiness to serve the residents of Porterville and surrounding areas in any hour of need and through any challenges posed, this indeed impacts the local economy, our district, and livelihoods of our community.”

The series 2020 bonds are expected to be issued as tax-exempt fixed-rate refunding bonds. The bond proceeds will refund all but $100,000 of the $28.7 million outstanding series 2015 revenue bonds and pay for the cost of issuance. Sierra View anticipates funding a defeasance escrow with internal reserves that will nullify and redeem the remaining $100,000 at maturity on July 1, 2021.

The skilled nursing facility replacement project, which was funded by the district’s series 2019 debt issuance, is expected to move the district closer to being seismically compliant by the state’s 2030 deadline. The project plans are coming along with construction expected to start in early 2021.

Even factoring in the pandemic and its impact on operations, the district managed to generate good profitability through the 12-month interims ending in June 30, 2020. Fitch Ratings views the districts’ operating flexibility to weather the pandemic while maintaining capital-related metrics easily consistent with the ‘A’ category expectations.

For Sierra View Local Healthcare District, this rating signifies a monumental step in the planning process for the SNF project. The series 2019 bond proceeds that will fund the facility replacement project and will expand care by adding nine additional beds for a total of 44-beds. Fitch expects the new facility will help Sierra View improve patient flow and efficient care coordination.

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