Fitch Revises Watch on Valley Health System (California) 'BB-' Bonds to Evolving.SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has revised the Rating Watch to Evolving from Negative the 'BB-' rating on the approximately $36.3 million Valley Health System hospital revenue bonds Hospital revenue bond A bond issued to finance construction of a hospital by a municipal or state agency. hospital revenue bond Tax-exempt debt issued by a city, county, state, or hospital authority with debt service guaranteed by hospital (refunding and improvements project), 1996 series A, and $48.4 million Valley Health System certificates of participation (refunding project), series 1993. The Rating Watch revision reflects Valley Health System's (VHS (Video Home System) A half-inch, analog videocassette recorder (VCR) format introduced by JVC in 1976 to compete with Sony's Betamax, introduced a year earlier. ) pending $485 million bond referendum and the receipt of the fiscal 2005 audited financial statements. In a special Sept. 19, 2006 mail election, residents of Hemet Valley Hospital District in Riverside County (CA) will vote on a $485 million general obligation bond referendum (Measure I), which will be needed to fund VHS' future capital needs. Passage of Measure I will require at least 2/3 of the district's voters to approve the measure. Successful passage of the bond proposal will create a new revenue stream from property taxes that is dedicated to payment of debt service on the general obligation bonds issued by the system for future capital expenditure. VHS' management intends to refund the outstanding series 1993 and 1996 bonds if the bond referendum is passed. In addition, bond proceeds would fund the VHS' seismic retrofitting and capacity needs at the Hemet Valley Medical Center and a new patient tower at the Menifee Valley Medical Center. Given VHS' weak liquidity position and historical operating losses, the failure to pass Measure I may result in a rating downgrade as the hospital system will be challenged to fund significant future capital needs. Fitch will continue to monitor the situation closely. VHS' audited financial statements for fiscal 2005 were completed February 2006 without any auditor adjustments. VHS posted a negative 1.4% operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: (loss of $3.8 million) and MADS coverage of 1.6 times (x).Through the unaudited twelve months ended June 30, 2006, VHS had a negative 1.7% operating margin. At June 30, 2006, VHS had unrestricted cash and investments of $22.7 million, which translated to 41.9 days cash on hand and cash to debt of 26.5%. VHS owns and operates three acute care hospitals with a total of 525 licensed beds and a skilled nursing facility skilled nursing facility n. Abbr. SNF An establishment that houses chronically ill, usually elderly patients, and provides long-term nursing care, rehabilitation, and other services. with 120 beds. The hospitals include Hemet Valley Medical Center (240 staffed beds), Menifee Valley Medical Center (84 staffed beds), and Moreno Valley Community Hospital (101 staffed beds). VHS covenants to provide only annual disclosure of financial and operating statistics (submitted to the NRMSIRs through the bond trustee within 120 days of fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. ), which is viewed negatively by Fitch. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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