Cleveland, OH,
05:25 PM

The MetroHealth System Bonds Garner $4.3 Billion in Orders

In a historic transaction this week, The MetroHealth System priced $945.7 million in hospital revenue bonds to fund its campus transformation, which includes the construction of a new 12-story, 270 bed hospital, a new central utility plant, new parking garage and several other essential projects.

MetroHealth will serve as issuer of Series 2017 fixed-rate hospital revenue tax-exempt bonds to fund all associated costs of the project. The bonds have a 40-year final maturity and average life of 28.4 years. The highly competitive issuance resulted in an All-In True Interest Cost for the bonds of 4.997 percent.

"We had 122 accounts (funds, banks, firms and individuals) put in orders for bonds," said Akram Boutros, MD, FACHE, president and CEO of MetroHealth. "Not only is this an important validation of the success we've earned with our strategy, recent growth and operating performance improvements, it's proof of the industry’s belief in MetroHealth and the path we’re taking.”

“During comprehensive investor presentations in Boston, Philadelphia, Princeton and New York, we noted wide interest in the transformation project and what it represents to the community. As the largest public construction project in Cuyahoga County, and one of the largest in the nation, the benefits to economic development of Cleveland and Cuyahoga County are substantial,” said Craig Richmond, senior vice president and chief financial officer of MetroHealth.

Bank of America Merrill Lynch and JP Morgan Securities are co-senior underwriters for the sale of the bonds. Kaufman, Hall & Associates has acted as MetroHealth’s financial advisers for the campus transformation since 2015.

Cuyahoga County is supporting the rebuilding of the hospital's main campus by obtaining a Letter of Credit to create a $64 million debt service reserve fund. Ultimately, the County's support will save MetroHealth millions of dollars on the total cost of the project.

Three weeks prior to the bond issue, Standard & Poor’s and Fitch assigned BBB- ratings to MetroHealth’s Series 2017 fixed-rate bonds, with Moody’s assigning a Baa3 rating. The rating agencies assigned stable outlooks, recognizing items including MetroHealth’s ongoing strong enterprise profile, which reflects its essentiality to the county, including its role as one of the region's largest Level 1 adult trauma centers and safety net providers.

MetroHealth self-financed $91 million for the first phase of the campus transformation, including the 2015 demolition of the North Coast Behavioral Health building and the 2016 vertical expansion of the Critical Care Pavilion, providing 85 critical care beds and Ohio’s only Special Disease Care Unit to treat patients with emerging contagious diseases including Ebola.

About The MetroHealth System

The MetroHealth System is an essential health system committed to providing health care to everyone in Cuyahoga County, Ohio, and improving the health of the community overall. Its 7,500 employees deliver care to everyone at its main campus, just west of downtown Cleveland, and at more than 20 other MetroHealth locations. Two new hospitals have recently opened in Cleveland Heights and Parma, and MetroHealth also provides health care at more than 40 additional sites in Cuyahoga County through community partnerships.

MetroHealth is home to Cuyahoga County’s most experienced Level I Adult Trauma Center, verified since 1992 by the Committee on Trauma of the American College of Surgeons, and one of two adult and pediatric burn centers in the state of Ohio verified by the American Burn Association. MetroHealth also is home to a verified Level II Pediatric Trauma Center.

In the past year, MetroHealth provided more than 1.4 million patient visits in its hospital and health centers. MetroHealth is also an academic medical center committed to teaching and research; each of its active physicians holds a faculty appointment at Case Western Reserve University School of Medicine. MetroHealth has earned Magnet status, which places it in the top six percent of all hospitals nationwide for nursing excellence.

MetroHealth’s mission is, “Leading the way to a healthier you and a healthier community through service, teaching, discovery and teamwork.” For more information, visit