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AVH Credit Rating upgraded to “stable”

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Moody’s Investors Services has revised Antelope Valley Healthcare District’s outlook to stable from negative. The upgrade in the outlook to stable is driven by a number of factors including the change in governance structure that will expand the number of board of directors’ members. According to Moody’s, the increased stability of the board reduces the likelihood of future abrupt changes in management or strategic direction that AV Hospital has experienced in recent years. Their stable outlook is further supported by the view that the stronger cash flow achieved in fiscal 2017 will continue into 2018.

In its report, Moody’s listed “stability of management and evidence of fruitful working relationship between management, the board and medical staff, and durability of operating cash flow margins at levels achieved in fiscal 2017” as factors that could lead to further upgrades.

Voters of the district approved a change in governance by the 3-1 overwhelming passage of Measure H on the November ballot. It will increase the board by four people. The new board will be comprised of nine individuals: five publicly elected members, three people appointed by the elected board members, and the CEO of the hospital.

According to Colette Menzel, Ph.D., COO and CFO, the journey started in 2012 when the hospital’s credit outlook was downgraded to negative by Moody’s. She added that “through the efforts of the board and management team, positive momentum has been created and the confidence has returned. In addition, volume has come back to the hospital and the support of the medical staff has increased. That really is validation that the hospital is on the correct path.”