Providence St. Joseph Health Series 2018 A&B

Providence St. Joseph Health Series 2018 A&B

$350,000,000 Series A Taxable Fixed Rate
$141,690,000 Series B Tax Exempt Fixed Rate

About Providence St. Joseph Health

Effective July 1, 2016, Providence St. Joseph Health was formed, creating one of the largest health care systems in the United States. The System operates 50 acute care hospitals, 23 long-term care facilities, 829 clinics, 14 supportive housing facilities, along with various ambulatory procedure centers, physician practices, pharmacies, home health services, rehab facilities, a high school, a university and health plans in seven states across the western United States. PSJH, including legacy Providence Health & Services, has been a Ponder client since 2015.

Focus on Value:

PSJH issued its 2018A bonds for general corporate purposes, and to take advantage of historical low interest rates by refinancing a portion of its variable rate line of credit. In addition, PSJH issued its 2018B bonds to currently refund existing bonds at a present value savings of $21 million or 12.7% of par.
Ponder worked with PSJH to develop the overall plan of finance including reviewing the relative value of different maturities and targeting a January financing to take advantage of the ‘January effect’, enhanced in 2018 given the significant December issuance caused by the 2017 Tax Reform. This allowed PSJH to be one of only two healthcare borrowings this week, ensuring that it had maximum visibility and demand. With over 50 investors viewing the roadshow, both deals were able to garner significant interest and were 3-8x oversubscribed. After repricing, yields were lowered on all bonds with the 2018A bonds pricing at 95 bps over the 30-year UST, one of the lowest spreads ever achieved for a healthcare borrowing (including those at higher ratings).


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