Valley View Regional Hospital has gained a lot of traction over the past year, thanks to a management agreement with Mercy Health System, new leadership and a strong city tax performance.
Because of that, Fitch Ratings – a global rating agency like Standard & Poor’s that provides independent data to the world’s credit markets – has upgraded Valley View to a BBB+ rating, up from a BBB rating.
“This is an outside confirmation of the greatly improved financial condition of Valley View,” said Bob Thompson, president and CEO of Valley View. “This is really good news for the Ada community.”
In large part, much of the success has come from Mercy taking on management of Valley View in spring 2009.
“Being partnered with Mercy, we have added strength and stability to our facility,” said Mary Krause, Valley View chief financial officer.
“Also, we’ve been able to turnaround Valley View’s financial outlook with new leadership that has led to improved operating profitability and a positive operating cash flow.”
In addition, the city has had a solid sales tax performance in 2009 which helped Ada generate enough needed revenue.
The upgraded rating reflects positively on the $7.7 million series 1996 hospital revenue bonds which are projected to be paid off later this year, four years before their maturity date.
Anything below a BBB rating is considered to be non-investment grade or “junk” bond quality.
“We have been extremely pleased with the focused efforts on controlling expenses and preserving revenues by Valley View’s management and employees,” said Dale Boatwright, chair of the Valley View board.
“In fiscal year 2009, the hospital generated a 6.8 percent operating earnings margin, which is significantly improved over 2008’s results. The trend continues upward in 2010.”
Valley View, with 116 staffed beds and a 20-bed rehab unit, reported operating revenues in fiscal 2009 of $70.4 million, up from $65.5 million in 2008.