South Broward Healthcare District Series 2018 Tax-Exempt Fixed Rate Bonds

30 Jan

Case studies

South Broward Healthcare District Series 2018 Tax-Exempt Fixed Rate Bonds

$101,575,000 Series 2018 Tax-Exempt Fixed Rate Bonds

About South Broward Healthcare District

South Broward Healthcare District (d/b/a Memorial Healthcare System or “MHS”) is located in Broward County, Florida and operates an integrated healthcare delivery system comprised of five hospitals, a multi-specialty physician practice, a clinically integrated physician hospital organization, post-acute providers and other health care related services at multiple locations. Memorial Regional Hospital, which includes the freestanding Joe DiMaggio Children’s Hospital, is MHS’s largest acute care hospital with 797-licensed beds and is located in Hollywood, Florida. Other hospitals in the system include: Memorial Regional Hospital South, a 216-licensed bed acute care hospital, Memorial Hospital West, a 486-licensed bed acute care hospital, Memorial Hospital Pembroke, a 301-licensed bed acute care hospital, and Memorial Hospital Miramar, a 178-licensed bed acute care hospital. MHS owns all of the acute care hospitals except MHP, which is operated under a third-party lease agreement. Also, part of MHS is Memorial Health Network, a clinically-integrated physician hospital organization. As of July 31, 2018, MHN had 1,363 physician members. Ponder has served as MHS’s financial advisor since 2005.

Focus on Value:

Ponder served as financial advisor to MHS for its Series 2018 new money financing. The competitive bond issue raised $100 million in proceeds to fund various capital expenditures. This was the fifth competitive sale completed for MHS in three years, each coordinated by Ponder. Without an investment bank in place, Ponder assisted MHS in all aspects of the financing process: from drafting Appendix A, to the rating agency process, to the initial structuring and through the marketing process. The overall sale was quite successful with eight bids received, including bids from all of the largest healthcare investment banks. Bank of America Merrill Lynch was selected to purchase the bonds having submitted the bid with the lowest Total Interest Cost (“TIC”). The winning structure used both 4% an 5% coupons in order to ensure a low long-term cost of capital and a TIC of 4.26% on a debt issue with an average life of 28 years. With another successful competitive sale, it is clear that the market has grown accustomed to the competitive bid process for MHS’s revenue bonds.

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