Stanford Health Care Series 2020 and 2020A

25 Mar

Case studies

Stanford Health Care Series 2020 and 2020A

Bond Sale Date: March 25-26, 2020

$300,000,000 Series 2020 Taxable Fixed Rate Bonds

$170,120,000 Series 2020A Tax-Exempt Fixed Rate Bonds

About Stanford Health Care

Stanford Health Care ( “SHC”) is the principal teaching affiliate of the Stanford University School of Medicine that provides primary and specialty health services to adults, including cardiac care, cancer treatment, solid organ transplantation services, orthopedics and neurosciences services. SHC, together with Lucile Salter Packard Children’s Hospital at Stanford, operates the clinical settings through which the School of Medicine educates medical and graduate students, trains residents and clinical fellows, supports faculty and community clinicians and conducts medical and biological sciences research.

SHC has operating revenues of $5.4 billion and provides a complete array of healthcare services and specialties throughout the Bay Area. Key service lines include cardiovascular health, cancer treatment, solid organ transplantation, orthopedics, and neurosciences. Such services are intensively focused on research and innovation, key strengths of SHC.

Pricing Results

Credit Ratings: Aa3/AA-/AA (Moody’s/S&P/Fitch)


Focus on Value

Ponder & Co. (“Ponder”) worked closely with SHC leadership during the past several months to plan and execute the sale of publicly-offered taxable and tax-exempt bond issues for new money projects and refinancing of existing debt.

Ponder supported SHC through all aspects of the financing, including plan of finance development, rating agency presentations and finance committee education, and worked closely with underwriters to adapt the finance plan to unprecedented volatility in the bond markets.

When the tax-exempt market became dislocated in mid-March, Ponder worked daily with SHC on contingency planning and securing financing alternatives in the private bank market.  We assisted management in establishing priorities among the various finance plan elements and identified options for meeting them if the new issue markets remained closed.  At the same time, Ponder facilitated collaborative communication among the four-underwriter finance team to ensure a consistent, streamlined process for SHC.

When market conditions improved within a narrow window of time, the preparedness and nimbleness of the financing team allowed SHC to be the first not-for-profit healthcare borrower to access the taxable market and the second to access the tax-exempt public markets.  On March 25th and 26th, SHC received strong demand with over 10x subscription of both taxable and tax-exempt final orders from over 80 unique taxable investors and 50 unique tax-exempt investors. With high demand, taxable credit spreads were tightened by 37bps and tax-exempt spreads were tightened by 15bps.  SHC locked in an all-in cost of capital near 3.30% for the combined 17yr average life deal.