Munson Healthcare Series 2019 A and B

6 Dec

Case studies

Munson Healthcare Series 2019 A and B

$18,360,000 Series 2019A Tax-Exempt Fixed Rate Bonds
$14,520,000 Series 2019B Tax-Exempt Fixed Rate Bonds

About Munson Healthcare

Munson Healthcare (“Munson” or “MHC”) is a Michigan nonprofit corporation organized to direct and oversee the delivery of a broad array of health care and related services through MHC’s various subsidiaries and affiliates in the northern portion of Michigan’s Lower Peninsula and the eastern part of Michigan’s Upper Peninsula. On a consolidated basis MHC has operating revenues of $1,039.2 million. MHC’s largest subsidiary is Munson Medical Center (“MMC”), a Michigan nonprofit corporation that operates a hospital in Traverse City, Michigan. MMC is the largest hospital in the northern Lower Peninsula and a certified Level II trauma center. It serves as a rural regional referral center for the surrounding 23- county area. In addition to the MMC, the MHC System includes eight (8) other rural-based hospitals, six (6) of which are wholly-owned subsidiaries of MHC and two (2) of which are contractual affiliates of MHC. The MHC System also provides the communities it serves with a broad spectrum of inpatient services, outpatient treatment, rehabilitation facilities, ambulance transportation, long-term care facilities and home-based medical services.

Focus on Value

Ponder served as financial advisor to Munson Healthcare for its Series 2019AB Revenue Bonds. In addition to the fixed rate bonds, Munson will be restructuring variable rate debt with the issuance of its 2019C VRDBs backed by a Direct Pay Letter of Credit.

The 2019AB Bonds, will be used to; (a) finance the acquisition, construction, renovation, and equipping of hospital facilities of Munson Healthcare Manistee located in Manistee, Michigan and (b) finance the renovation, construction, expansion, and equipping of hospital facilities of Munson Healthcare Otsego Hospital located in Gaylord, Michigan.

Due to the smaller size of the two series of bonds the demand for shorter term maturities was light with some maturities unsubscribed and others seeing 2-4x oversubscription. With Ponder as the pricing advocate Munson was able to lower yields on the longer 2044 and 2049 term bonds 1-4 basis points and maintain no changes to the other maturities.

Munson was able to achieve a TIC of 4.146%.

Pricing Results:

Credit Ratings: A1/NR/AA-

Pricing results for Munson Healthcare Series 2019 A and B

Comparable Bond Sales:

Comparable Bond Sales


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