Moody's Investors Service placed Antelope Valley Healthcare District's Baa3-rated revenue bonds on review for downgrade following the unexpected resignations of its CEO and CFO. The review will last for 90 days.
The Hospital District, which operates a 420 bed hospital, has $134 million in outstanding debt. In May, both the CEO and CFO resigned, for reasons that are unknown. The hospital, which employs 2000 people, is the region's only full-service hospital and the only hospital in the area that provides obstetrical services.
According to the Bond Buyer, the hospital announced in November 2012 that it won't meet its rate covenant of 1.3 times MADS coverage in fiscal 2013 due to additional expenses to be incurred before the end of the fiscal year. It expects coverage to be above 1.1 times, but coverage below 1.3 times is considered a technical default with the remedy being a requirement that a consultant be engaged.
Antelope Valley Healthcare District is the next in a trend of hospital...