Beebe Medical Center, Inc. Series 2018
$169,870,000 Series 2018 Tax-Exempt Fixed Rate Bonds
About Beebe Medical Center
Beebe Medical Center, Inc. (“Beebe”) in Lewes, Delaware owns and operates a 210 licensed-bed acute care community hospital facility (the “Medical Center”) and outpatient care centers throughout its service area, including a cancer center. Lewes is located in eastern Sussex County in southern Delaware – Beebe’s primary service area and home to most of Delaware’s beaches and seaside resorts. No other hospital is located in its primary service area and Beebe has a 65% market share. In fiscal year 2018, Beebe employed over 2,500 people (including 110 physicians) admitted 18,469 inpatients and observation patients and generated approximately $415 million in total patient service revenue.
Focus on Value
Ponder served as financial advisor to Beebe for a public offering of its Series 2018 Revenue Bonds (issued by the Delaware Health Facilities Authority). The capital projects to be paid for with Series 2018 Bond proceeds, along with community donations (approximately $23 million), will enable Beebe to provide more efficient and convenient access to its broad range of inpatient and outpatient services for Sussex County’s rapidly growing population. Ponder worked with Beebe on its bond rating strategy which achieved a “BBB” rating from S&P Global Ratings (“S&P”) and investor presentation which was viewed by 49 institutional investors. Ponder also helped Beebe evaluate in 2017, using S&P’s rating evaluation service, its ability to finance the proposed $190 million of capital projects and their affect on Beebe’s creditworthiness.
Ponder worked with the bond underwriters to take advantage of improved bond market conditions to structure and price the bonds with an attractive average cost of funds of 4.5%. The bond sale timing paid off as investor orders exceeded the bond issue amount almost 5x (over $800 million in orders). 35 institutional investors participated. Due to the oversubscription for the bonds, the underwriters were able to lower yields 1-7 basis points for all bond maturities.
Beebe achieved an “all-in” True Interest Costs (effective borrowing rate) of 4.516%.
Credit Ratings: “BBB” with Stable Outlook
Comparable Bond Sales:
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