Sierra View receives A bond rating

Sierra View Medical Center has received an A rating for how it has issued bonds for financing, with the bulk of the financing going to fund a new skilled nursing facility.

Sierra View received the A rating from Fitch, an award-winning provider of credit ratings and commentary and research. Fitch stated the A rating was given for an outstanding series of 2019 and 2020 revenue bonds issued by Sierra View.

The rating denotes a high credit quality and a an ability to pay off financial commitments that’s considered strong, allowing for $24.2 million in bonds to be issued for Sierra View in 2020.

In 2019, Sierra View issued bonds to fund its new skilled nursing facility. “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 2020 bonds are expected to be issued as tax-exempt fixedrate refunding bonds. The bond proceeds will refund all but $100,000 of the $28.7 million in bonds approved by the Sierra View board in 2015 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 2019 bonds, is expected to move Sierra View closer to complying with earthquake standards 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, Sierra View managed to generate profitability through the fiscal year ending in June 30, 2020. Fitch stated Sierra View’s operating flexibility to weather the pandemic while being financially sound made it easy to find the hospital met ‘A’ rating standards.

Sierra View stated the rating signifies a “monumental” step in the planning process for the skilled nursing facility project. The 2019 bonds that will fund the $26.5 million facility replacement project and will expand care by adding nine additional beds for a total of 44 beds. Fitch stated it expects the new facility will help Sierra View improve patient flow and efficient care coordination.

The facility will be constructed just east and adjacent to the hospital on land owned by the hospital where a parking lot is now.