Henry Ford Health System Series 2019A Tax-Exempt Fixed Rate Bonds

25 Apr

Case studies

Henry Ford Health System Series 2019A Tax-Exempt Fixed Rate Bonds

$227,910,000 Series 2019A Tax-Exempt Fixed Rate Bonds

About Henry Ford Health System

Henry Ford Health System (“HFHS”) is a Michigan-based vertically integrated regional health care network. The System has five acute care hospitals, two psychiatric hospitals, one specialty hospital, Henry Ford Medical Group, Health Alliance Plan of Michigan and its subsidiaries. In addition, HFHS has comprehensive provider assets including an ambulatory network with medical and health centers, a substance abuse facility, behavioral health clinics, home-based care, pharmacy, eye care, and other retail-oriented services. HFHS has more than 200 care delivery locations, serving patients in southeast and south central Michigan.

Comparable Bond Sales

Henry Ford Comparable Bond Sales

Focus on Value

Since 2016 Ponder has served as financial advisor to Henry Ford Health System on all debt transactions. As part of HFHS’s 5-year strategic plan, the System is expected to spend $1.95 billion in capital investments for existing facilities and new ambulatory care facilities. A combination of debt, cash from operations and fundraising will fund these projects. Bond proceeds generated by the Series 2019A financing will finance a portion of the Allegiance Tower, the Cancer Pavilion and the Center for Athletic Medicine capital projects in additional to the capital improvements for existing HFHS facilities.

Ponder worked with HFHS on all aspects of the financing, starting with underwriter selection, plan of finance development to rating agencies and investor marketing strategies assessment. During the financing process, HFHS received a rating upgrade to A2 from Moody’s.

HFHS was the first healthcare borrower to issue a large long-term fixed rate bonds in the State of Michigan since the beginning of 2019. The opportune market timing coupled with investor and credit support strategies led to strong investor demand. Ponder served as HFHS’s pricing advocate throughout the process. Ponder provided market guidance which specifically resulted in a mixture of 4.0% and 5.0% coupon bonds, which accomplished HFHS’s goal to achieve a low all-in cost. Given the strong demand, HFHS was able to lower yields in the two term bond maturities significantly generating additional cash flow savings.

Pricing Results:

Credit Ratings: A2/A/NR
Henry Ford Pricing Results

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