Boston Children’s Hospital Series 2020A
Pricing Date: June 29, 2020
$300,000,000 Series 2020A Bonds
Objectives
In the midst of a 10-year capital spending program, Boston Children’s Hospital (BCH) sought to take advantage of low interest rates to reimburse itself for capital expenditures and preserve Balance Sheet liquidity, while maintaining existing ratings and moving to a modern MTI.
Challenges
Similar to acute care hospitals, the global pandemic caused revenue pressure for children’s hospitals, but they received less governmental support. Significant market volatility caused BCH to pause its financing, and then quickly restart the process as rates improved.
Solution
Ponder advised BCH through all aspects of the plan of finance development and execution.
- Debt Capacity: Ponder advised on the overall financing size to optimize the borrowing within rating parameters.
- Rating Agency Process: Ponder assisted in preparing materials and messaging.
- MTI Modernization: Ponder advised on a modernization of the MTI which includes more flexible covenants.
- Plan of Finance: Ponder reviewed all financing options (tax exempt vs. taxable, private versus public, etc.) with management, and recommended the taxable public fixed rate bonds to achieve BCH’s goals of flexibility, quick execution and lowest cost.
- Marketing: Ponder advised on all aspects of the marketing process including drafting the investor presentation, assisting in Q&A preparation, and advising on all 1×1 investor calls.
- Pricing: Ponder worked with the banks to ensure that the lowest possible rate was achieved (which was an all-time low of 2.585% for 30-year taxable not-for-profit healthcare bonds).
About Boston Children’s Hospital: Aa2/AA (Moody’s/S&P)
Ranked the #1 pediatric hospital in the nation for the seventh straight year by U.S. News & World Report, Boston Children’s Hospital is a leading center of pediatric clinical care and research, and serves as the primary pediatric teaching hospital of the Harvard Medical School.
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