Lakeland Regional Health Series 2021 Bonds

18 Aug

Case studies

Lakeland Regional Health Series 2021 Bonds

Pricing Date: July 15, 2021

Closing Date: August 17, 2021

$225,710,000 Series 2021 Bonds


Lakeland Regional Health (“LRH”) sought to finance a payment to the City of Lakeland in connection with amending its existing lease in perpetuity, the construction of a 96-bed behavioral health facility and a current refunding of its 2011 Bonds.


  1. Rating agencies typically view “in direct debt” lease payments differently than long-term “direct” debt however LRH was able to issue the 2021 Bonds and maintain its current A2 rating from Moody’s
  2. With interest rates nearing all-time lows and credit spreads tightening, some investors had signaled they may wait on the sidelines as all-in yield levels remained low


  1. Cash Flow Savings: The financing will generate almost $85 million in gross cash flow savings to LRH
  2. Fixed Rate Pricing: Ponder worked with management and the banking team to advocate for 4% coupon bonds in earlier serial maturities to reduce the overall interest cost of the issue
  3. Rating Agency Process: Drafted materials and messaging for the rating process to show the benefit from the refunding of the lease while taking on “new” long term debt
  4. Master Trust Indenture: Upon issuance, the 2021 Bonds will represent over 50% of LRH’s outstanding indebtedness allowing LRH to amend and restate its Master Trust Indenture
  5. Acquisition Treatment: LRH was able to utilize acquisition treatment to finance the payment to the city with tax-exempt bond proceeds
  6. Pricing: Overall, the deal was very well received with over 49 investors placing orders; Lakeland secured a cost of capital of 1.91% (All-in TIC) on the fixed rate bonds

About Lakeland Regional Medical Center: ‘A2’ (Moody’s)

Lakeland Regional Medical Center is the 5th largest hospital in Florida, currently operating 841 staffed bed at LRHS’ sole inpatient hospital. The campus encompasses over 70 acres and occupies over 1.4mm of square feet of facility space. The Hospital is the only acute care facility located in the PSA and maintains a dominant primary market share position (77% for the FYE September 30, 2020).

Pricing Results:

Lakeland Regional Series 2021 Pricing Results

Comparable Bond Sales:

Lakeland Regional Series 2021 Comparable Bond Sales