CaroMont Health Series 2021A and 2021B Bonds

12 Feb

Case studies

CaroMont Health Series 2021A and 2021B Bonds

Pricing Date: January 20, 2021

Closing Date: February 10, 2021

$40,950,000 Series 2021A Bonds

$64,310,000 Series 2021B Bonds


CaroMont Health (“CaroMont”) sought to take advantage of the current low-rate environment to finance construction of a critical care patient tower on their main hospital campus in Gastonia, NC, while leveraging their substantial liquidity position to obtain the lowest Yield to Maturity possible.


  1. Executing a financing amidst the financial and operating strains of the COVID-19 pandemic
  2. First public debt issuance since 2010
  3. CaroMont had only maintained one rating (S&P)
  4. Determining the optimal capital structure
    1. Balancing long-term fixed rate bonds and shorter put bonds
    2. Factoring in bank financing ($153M and associated mandatory put dates


  1. Crafted a strategic Rating Agency approach: Ponder advised on management’s decision to add a Fitch rating to the bonds, which led to two AA- ratings and created positive marketing momentum
  2. Structured roughly 60% of financing as lower costing 5-year put bonds, effectively hedged by CaroMont’s $778 million of unrestricted cash (as of 10/31/2020), producing 1.40% all-in TIC overall
  3. Chose 5-year put based on yield and desire to stagger mandatory tender dates, including bank financings
  4. Positioned traditional fixed rate bonds in the front-end of the yield curve (2022 – 2036) to minimize their interest cost through a serial bond structure utilizing a variety of coupons (serial all-in TIC of 1.91%)

About CaroMont Health: AA-/AA- (S&P/Fitch)

CaroMont Health is a multi-state, integrated health care system consisting of an acute care hospital, ambulatory-based physician clinics, urgent care centers, imaging centers, an oncology center, an ambulatory surgery center, a skilled nursing and assisted living facility, occupational health services, and a hospice facility and services, with its principal location in Gastonia, North Carolina. For the fiscal year ended June 30, 2020, CaroMont generated over $600 million of net patient service revenue and had over 600 days of cash on hand. Ponder has advised CaroMont since 2018.

Pricing Results:

CaroMont Pricing Results Series 2021 A and B

Comparable Bond Sales:

CaroMont Comparable Bond Sales Series 2021 A and B