Cleveland, OH,
10
May
2017
|
11:25 AM
America/New_York

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 redefining health care by going beyond medical treatment to improve the foundations of community health and well-being: affordable housing, a cleaner environment, economic opportunity and access to fresh food, convenient transportation, legal help and other services. The system strives to become as good at preventing disease as it is at treating it.

The system’s more than 600 doctors, 1,700 nurses and 7,800 employees go to work each day with a mission of service, to their patients and to the community. As Cuyahoga County’s safety-net health system, MetroHealth plays an essential role in the region, caring for anyone and everyone, regardless of an ability to pay.

Founded in 1837, MetroHealth operates four hospitals, four emergency departments and more than 20 health centers and 40 additional sites throughout Cuyahoga County. The system serves more than 300,000 patients, two-thirds of whom are uninsured or covered by Medicare or Medicaid.

MetroHealth is home to Cuyahoga County’s most experienced Level I Adult Trauma Center, verified since 1992, and Ohio’s only adult and pediatric trauma and burn center.

As an academic medical center, MetroHealth is committed to research and to teaching and training tomorrow’s caregivers. Each active staff physician holds a faculty appointment at Case Western Reserve University School of Medicine. Its main campus hospital houses the Cleveland Metropolitan School District’s Lincoln-West School of Science & Health, the only high school in America located inside a hospital.

Knowing that good health is about much more than good medical care, MetroHealth has launched the Institute for H.O.P.E.™ (Health, Opportunity, Partnership, Empowerment), which uses a coordinated, collaborative and strategic approach to help patients with non-medical needs such as healthy food, stable housing and job training.

The MetroHealth Glick Center, a new 11-floor hospital, is under construction on the system’s main campus in Cleveland and is scheduled to welcome its first patients in October 2022. The billion-dollar project is the cornerstone of a wider neighborhood revitalization effort led by the system and its partners in the community.

For more information, visit metrohealth.org.