AtlantiCare Regional Medical Center
On September 13, 2023, the Authority closed on the $61,705,000 privately issued tax-exempt Series 2023 bond financing on behalf of AtlantiCare Regional Medical Center.
AtlantiCare Regional Medical Center is a 593-licensed-bed, acute care, not-for-profit hospital facility with two campuses in Atlantic City and Galloway Township, New Jersey. AtlantiCare Health Systems, Inc., the parent company, is currently rated AA- by both S&P Global Ratings and Fitch Ratings on their long-term, public debt.
TD Bank N.A. directly purchased the 2023 bonds.
The proceeds of this transaction were used, among other things, to reimburse the borrower for the costs of planning, development, acquisition, construction, equipping, expansion, furnishing, and renovation of all or a portion of various capital projects of the borrower and its affiliates.
Additionally, proceeds were used to pay costs incurred with issuing and selling the Series 2023 bonds. The transaction was structured as one fixed rate maturity, with sinking fund installments from 2025 to 2053. The yield on the Series 2023 bonds is 4.27%, maturing on July 1, 2053.
It is estimated that the borrower saved approximately $11 million by using a tax-exempt financing structure versus a taxable one.
Holy Name Medical Center
On July 12, 2021, the Authority closed on $45,437,000 of tax-exempt bonds on behalf of Holy Name Medical Center in Teaneck, New Jersey. The proceeds of the transaction were used to currently refund the Authority’s Series 2016A & Series 2016B bonds and pay the related costs of issuance. The bonds were privately placed with TD Bank, N.A.
The all-in TIC was 1.864737%. The present value savings over refunded the bonds was $1,652,815. The estimated savings of tax-exempt versus taxable bonds was $1,174,618. The present value of a 1 basis point change was $37,258.34.
AtlantiCare Health System
On August 31, 2021, the Authority along with Bank of America Securities, as the senior managing underwriter, priced the $216,995,000 publicly issued tax-exempt Series 2021 bond financing on behalf of AtlantiCare Health System. The bonds were rated AA- by both Standard & Poor’s and Fitch Ratings.
The proceeds of the Series 2021 bonds will be used to: (1) refinance a taxable commercial bank loan taken by the Borrower, the proceeds of which were used by the Borrower to repay the Borrower’s debt to Geisinger Health and upon dissociation from Geisinger Health necessitated the refunding, repayment, and/or defeasance of the Borrower’s outstanding indebtedness of Geisinger Health (the “Loan Refinancing”), (2) reimburse the Borrower for the costs of planning, development, acquisition, construction, equipping, expansion, furnishing and renovation of all or a portion of one or more of the various capital projects of the Borrower and its affiliates, (3) fund a debt service reserve fund for the Series 2021 Bonds, if necessary, and (4) pay certain costs incurred in connection with the issuance and sale of the Series 2021 Bonds.
The transaction was structured with fixed rate serial bonds maturing from 2020 to 2039 and bi-furcated fixed rate term bonds maturing in 2046 and 2051.
The all-in total interest cost was 2.403%.
RWJBarnabas Health
On September 21, 2021, the Authority staff priced the $751,845,000 publicly issued tax-exempt Series 2021A bond financing on behalf of RWJ Barnabas Health. The bonds were rated AA- by Standard & Poor’s and Aa3 by Moody’s. Citigroup Global Markets was the senior managing underwriter,
The proceeds will be used to (1) finance and/or reimburse RWJB for the costs of planning, development, acquisition, construction, equipping, expansion, furnishing and renovation of one of more of the following capital projects: a) construction of a new 515,000 square foot, eleven story addition to the Rutgers Cancer Institute of New Jersey Pavilion (the “CINJ Pavilion”), b) purchase of land in New Brunswick, NJ, on which the CINJ Pavilion will be constructed, c) Renovation and upgrading of the kitchen at Clara Maas Medical Center, d) construction of new rooftop and renovations of the Emergency Department at Community Medical Center, e) multiple projects at Jersey City Medical Center including but not limited to renovations of the Emergency Department and Antenatal Testing Unit, f) acquisition of land and design of a cancer and ambulatory center at Monmouth Medical Center – Fort Monmouth campus, g) renovations of the HVAC system at Monmouth Medical Center – Southern Campus, h) renovation of the Emergency Department, catheterization lab, and kitchen at Newark Beth Israel Medical Center, i) multiple projects at Robert Wood Johnson University Hospital in New Brunswick including but not limited to renovations to the Surgical Suite, construction of a new ICU trauma unit, and structural deck repairs, j) expansion of the catheterization lab, same-day surgery at Robert Wood Johnson University Hospital Somerset Campus, k) renovations of the Emergency Department at Saint Barnabas Medical Center (2) acquire and install various items of capital equipment at one or more project locations; and (3) pay all or a portion of the costs of the issuance and sale of the tax-exempt obligations.
The transaction was structured with fixed rate serial bonds maturing from 2022 to 2045 and a tri-furcated fixed rate term bond maturing in 2051.
Yields on the Series 2021 serial bonds ranged from .06% for the 2022 maturity to 1.94% for the 2045 maturity. Yields for the fixed rate term bond are as follows: for the 2.625% coupon term bond maturing on July 1, 2051, a yield to call of 2.625%; for the 3.000% coupon term bond maturing on July 1, 2051, a yield to call of 2.40%; and for the 4.00% coupon term bond maturing on July 1, 2051, a yield to call of 2.04%.
The estimated savings generated from issuing tax-exempt bonds compared to taxable bonds was $9,247,290.
This transaction closed on September 30, 2021 with an all-in total interest cost of 2.7302%.
