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Antelope Valley Healthcare District Announces Debt Refinancing

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(LANCASTER, Calif.) — Antelope Valley Healthcare District announced today that it has closed a structure to refinance all of the district’s debt into a fixed-rate long-term public bond issue. This refinancing greatly strengthens Antelope Valley Hospital’s financial flexibility by eliminating the balloon payment on its existing debt that was due in September 2017.

The $140 million Series 2016A bonds will reach final maturity in 2046. Net interest cost on the bonds is just below 5 percent, which is slightly lower than current market rates of the HUD insured loan previously considered. As part of the refinancing, the “cash on hand” covenant has been reduced from 90 to 55 days, debt service coverage ratio has been reduced to 1.2 from 1.3, and the mortgages on the medical office buildings owned by the district have been removed. The new indenture also allows the district to close a line of credit that will help with cash management and supplemental payment variability.

“These market transactions, combined with our current strong financial performance, speak to a bright future for our hospital and for the healthcare of our entire community,” said Dr. Doddanna Krishna, chairman of the board of Antelope Valley Healthcare District. “We are now better positioned than ever to fund the kind of ongoing operations, select capital projects, and new programmatic needs that will allow our hospital to keep up with the demands of our growing population.”

The securing of the new bond offering has been a multi-year project under the direction of hospital Chief Financial Officer Paul Brydon working in conjunction with Lancaster Pollard & Co, the districts long-term investment banker. Alecto Healthcare CEO Lex Reddy and Antelope Valley Hospital CEO John Rossfeld, who joined the hospital’s team in November and January respectively, played a vital role in seeing this transaction through its successful conclusion.

About Antelope Valley Hospital

Antelope Valley Hospital, a 420-bed district hospital located in the city of Lancaster in northern Los Angeles County, has been serving the community for more than 60 years. The area’s only full-service hospital, AVH provides a full array of medical/surgical services, pediatric treatment, NICU, mental health, cancer care and more. It is a Level II trauma center, Accredited Chest Pain Center, Advanced Primary Stroke Center and a Certified Community Cancer Center. More information is available at www.avhospital.org or by calling 661-949-5000. Follow us on Facebook at facebook.com/antelopevalleyhospital.