On July 2nd, Fitch Ratings affirmed the A- rating on Covia’s revenue bonds, with a rating outlook of “Stable.” Covia first received an A- rating in 2017.
“Covia benefits from its size and scale with five full service retirement communities located in desirable locations throughout Northern California, with a total operating revenue base of nearly $150 million,” Fitch reports. “Along with a sophisticated and centralized management structure, Covia’s revenue diversity offsets credit risks relating to operating volatility, competitive pressures and actuarial risk.”
After the February decision by the Covia Communities Board to proceed with the closure of Los Gatos Meadows, Diana Jamison, Covia’s Chief Financial Officer, immediately reached out to Fitch to provide them with details. “They appreciated our transparency and proactive response and requested specific information. Fitch then scheduled a formal surveillance process to review our rating given the impact of the closure,” reports Kevin Gerber, CEO.
During the surveillance meeting, which takes place every two years, “We demonstrated that we are a strong, healthy organization, even given this temporary closure of Los Gatos Meadows,” says Jamison. The Fitch report demonstrates that “they had faith in management and had faith in the strength of our financial performance.”
“Fitch understands our industry better than any other rating agency,” says Jamison. To be able to maintain Covia’s A- rating feels “Awesome. I don’t even know how to explain it any other way.”
“I’m proud of the fact that we’ve been able to maintain our financial strength. It says a lot about the organization.”