Valley View Series 2018 Revenue Bonds

8 May

Case studies

Valley View Series 2018 Revenue Bonds

$57,160,000 Series 2018 Revenue Bonds

About Valley View Hospital

Valley View Hospital Association (“VVHA”) owns and operates Valley View Hospital, a 49 bed general acute care hospital in Glenwood Springs, Colorado, approximately 160 miles west of Denver, Colorado. VVHA also owns and operates care centers in the nearby communities of Eagle, Basalt, and Silt, Colorado, along with various other health care facilities on the Colorado Western Slope. In 2017, Valley View had total operating revenues of $230 million and an 8.5% operating margin. VVHA has a market share of 67% of all inpatient discharges in its primary service area; the closest competitor, St. Mary’s Medical Center, has 7% market share.

Focus on Value:

Valley View restructured existing variable rate direct purchase bonds to 5-year put bonds in order to take advantage of low intermediate rates and minimize any potential impact of future interest rate hikes. Valley View was also able to eliminate certain restrictive covenants through this restructuring. Ponder provided education on all available products so Valley View could make an informed decision on the financing costs, benefits, and risks.

The 2018 bonds will be used to:

  • Refund outstanding Series 2014 bonds in principal amount of $17.11 million
  • Refund outstanding Series 2017 bonds in principal amount of $40.80 million

The bonds were structured with a “hard” put reducing the put premium on the bonds. Ponder provided pricing advocacy services resulting in the offering of the bonds with a par coupon below 3% which was considered a barrier. The Series 2018 put bonds were 7x oversubscribed, enabling a reduction in yield by 7.5 basis points.

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