LOS ANGELES — Standard & Poor's upgraded the underlying rating of Citrus Valley Health Partners' certificates of participation to investment grade and gave the COPs a positive outlook.
S&P on Jan. 8 raised to BBB-minus from BB-plus the rating on the eastern Los Angeles health system, comprised of three hospitals and a hospice, citing improved financials.
The eastern Los Angeles not-for-profit hospital system has $67.7 million in outstanding debt comprised of Series 1998 fixed rate debt and auction rate COPs issued through the California Statewide Communities Development Authority.
"The rating action reflects our view of CVHP's vastly improved financial profile since fiscal 2011, driven by California's provider fee program and management's strategies to strengthen the organization's underlying operating performance," said Standard & Poor's credit analyst Kenneth Gacka.
The health system receives 28% of its revenues from the California provider fee program as a large Medi-Cal provider, according to a Moody's Investors Service ratings report.
Gacka cited a strong balance sheet and margins and the hospital system maintaining maximum annual debt service since fiscal year 2012 in his rating report. Management also was lauded by S&P analysts for defining clear, strategic goals with a focus on improving the underlying operating performance.
Moody's revised the Citrus Valley hospital system's outlook to positive from stable on Oct. 22 and affirmed its Ba2 bond rating.
CVHP commanded 31.9% market share in 2012 in its primary service area in eastern Los Angeles County, according to the Moody's report.
The regional health system reports a $400 million revenue base generated by its three acute care hospitals and a hospice/home health care located in contiguous service areas that serve a population of close to 1 million people in the San Gabriel Valley.
