Beverly Hospital scores $40 million bond, shows credit turnaround
The 224-bed acute-care facility will use the funds to modernize and expand, as well as provide fiscal stability.
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Beverly Hospital in Los Angeles has secured a $39.7 million bond from the California Statewide Communities Development Authority, a first bond issuance in the hospital's 66-year history.
Prior to the announcement, Beverly's long-term credit rating prohibited the issuance of any such bonds.
That all changed after a two-year financial turnaround, resulting in a BBB credit rating from Standard & Poor's Rating Services, which deemed the hospital's financial outlook stable. The 224-bed acute-care facility will use the funds to modernize and expand, as well as provide fiscal stability.
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The bond proceeds will be used to reduce debt and pump millions in cash into creating a modern, technologically advanced community hospital with the hopes of improving patient care in the East LA area.
Better operating performance during that two-year period also helped improve the hospital's credit rating.
Beverly's plan now calls for capital spending of roughly $36.7 million through fiscal year 2018, which will be funded from the bond and from the hospital's positive fiscal operations.
"This is a significant milestone in the history of Beverly Hospital as well as a pledge to our patients and the communities we serve," said hospital CEO Alice Cheng in a statement. "The bond will allow us to expand our key services including our emergency department and maternity unit, and will allow us to continue our mission as an independent, nonprofit hospital for many years to come."
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Dr. Carlos Manuel Haro, chairman of the hospital's Board of Directors, said in a statement he expects Beverly to be one of the most modernized healthcare facilities in the area within the next few years.
CFO Larry Pugh was optimistic about the hospital's future.
"Standard & Poor did months of due diligence about the hospital and concluded that our long-term fiscal outlook reflected the basis for the bond to be issued by the California Statewide Communities Development Authority," he said in a statement. "Our current financial condition, based on two years of positive growth and stability, played a key role in the Authority issuing the bond. All parties expressed confidence in our long-term outlook and expansion program to serve our communities with high quality healthcare for many years to come."
