Beloit Health System Series 2020 Tax-Exempt Fixed Rate Bonds

7 Nov

Case studies

Beloit Health System Series 2020 Tax-Exempt Fixed Rate Bonds

$21,325,000 Series 2020A Tax-Exempt Fixed Rate Bonds

About Beloit Health System

Beloit Health System (“BHS”) is a Wisconsin based nonprofit corporation that owns and operates the Beloit Memorial Hospital (the “Hospital”). The mission of Beloit is to be the leader in regional health and wellness services that delivers high quality, value and satisfaction to the patients and communities it serves.

Beloit has operating revenues of approximately $247.0 million. The Hospital is the only acute care hospital in the Hospital’s primary service area and one of four acute care hospitals in Rock County, Wisconsin. Beloit also operates an outpatient surgery facility just over the Illinois border and other patient care facilities throughout the Rock County area, including a heart hospital within the main Hospital; a cancer center; immediate care facility; and dialysis center. The Beloit Clinic, a 69-member multi-specialty physician clinic is fully integrated into BHS. Consistent with the mission, BHS owns and operates two assisted living facilities designed for senior residents who require on-site health care.

Pricing Results

Credit Ratings: A Stable (Fitch)


Focus on Value

Ponder & Co. (“Ponder”) worked closely with Beloit management and governance during the past four months to plan and execute the sale of a publicly-offered fixed rate bond issue for refunding Beloit’s existing callable long-term debt.

Ponder worked with Beloit management to review plan of finance structures that would maximize debt service savings by taking advantage of today’s low rates. To this end, the sale incorporated 4% coupon bonds to lower the overall Yield to Maturity. Ultimately, Beloit was able to price in $13.8mm of 4% coupon bonds maturing in 2020-2036, and saw 1.3x subscription for the bonds.

Ponder supported Beloit through all aspects of the financing, including running an underwriter RFP process, plan of finance development, rating agency call preparation, and working with underwriters to achieve the most favorable bond sale pricing.

On pricing day, Beloit received strong demand with up to 1.3x subscription of final orders. Beloit secured a spread to MMD of 86bps in the long end, an attractive cost given the 7bps increase in MMD on pricing day. Beloit locked in present value debt service savings of over $4.4mm (17.2% of refunded bonds) with an all-in cost of capital of 2.94%.

Comparable Bond Sales