Fitch downgraded Porterville, Calif.-based Sierra View Local Health Care District's rating to "A-" from "A."
Sierra View Local Health Care District oversees Sierra View Medical Center, a 167-bed, full-service facility in Porterville.
Fitch said in a July 8 report that the downgrade primarily reflects Sierra View's challenged financial performance since fiscal 2023, which resulted in a $16 million loss (-10.2% operating margin)."
The ratings agency said the downgrade also reflects the district violating its debt service coverage covenant, according to the report. Fitch anticipated the breach but said Sierra View is expected to post lower than historical margins going forward due to continued operating pressures. The weaker operating performance has been driven by volume declines and heightened labor and supply expenses that are "primarily related to post-pandemic inflationary pressures."
Sierra View Local Health Care District has a stable outlook with Fitch.