- On July 1, 2016, Hackensack University Health Network, Inc. and Meridian Health System, Inc. merged to form Hackensack Meridian Health, Inc. (the “Network”).
- The Network is comprised of 13 hospitals, various physician practices, more than 120 ambulatory care centers, surgery centers, home health services, long-term care and assisted living communities, inpatient and outpatient behavioral health facilities, ambulance services, air medical transportation, fitness and wellness centers, rehabilitation centers, and urgent care
and after-hours centers.
- After completion of the merger, the Network engaged Raymond James as Financial Advisor to assist with a comprehensive debt restructuring that would conclude with the Network’s first bond issuance post-merger.
- Raymond James developed and implemented a comprehensive Plan of Finance that included:
- (i) bridge financing of $73 million using acquisition financing rules to preserve eligibility for certain tax-exempt refinancings;
- (ii) negotiation of a new Master Trust Indenture (“MTI”) with more flexible covenants employing a “Corporate Parent
- (iii) leading the Network through the rating agency process that resulted in an “A+” with a positive outlook from S&P and an upgrade to “AA-” from Fitch;
- (iv) bank consents from four different creditors on 14 separate agreements totaling approximately $600 million in notional;
- (v) note substitutions on $165 million in bonded debt; and
- (vi) the issuance of the Series 2017A Tax-Exempt Bonds and Series 2017 Taxable Bonds.
- On April 5, the Network entered the market with its $588.8 million tax-exempt Series 2017A bonds with a 40-year final maturity, including $493.6 million of refunding bonds and $95.2 million in new money. The refunding achieved approximately $37.9 million in net present value savings to the Network while also extending its average life to improve near-term cash flow savings. The new money bonds were issued with an average life of 35 years at an all-in cost to the Network of 4.41%. The overall TIC was 3.92%.
- Following a successful tax-exempt pricing, the Network entered the market on April 6 with a $300 million taxable corporate bond issuance with a 40-year bullet maturity. After receiving strong support from the investor community, the Network was able to lock-in a spread of 155 basis points to the 30-year U.S. Treasury (yield of 2.998%) resulting in a final yield of 4.548% to a coupon of 4.50%.
- Following execution of the comprehensive Plan of Finance, Hackensack Meridian Health has substantially all of its debt under one unified MTI that reflects the breadth, depth, and credit caliber of the new Network.
Co-Head, Healthcare Finance
Senior Vice President
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