July 20, 2022 — On Thursday, June 23, Jupiter Medical Center (“JMC”), rated BBB- with a positive outlook/BBB stable by Standard & Poor’s and Fitch Ratings, respectively, priced approximately $152 million, tax-exempt fixed rate bonds (the “Series 2022A Bonds” or the “Bonds”). Proceeds from the Series 2022A Bonds will fund a portion of a number of strategic capital projects, including: a surgical institute, a patient tower, a medical office building and a parking garage. H2C Securities Inc. served as JMC’s financial advisor.
The Series 2022A Bonds were structured with serial bonds from 2028 to 2042 and term bonds in 2047 and 2052.
The Bonds were priced in a challenging market environment due to market volatility that led to weaker than expected execution on tax-exempt health care transactions in the week leading up to pricing.
Despite market volatility, the Series 2022A Bonds were priced at yields equal to or through comparable, health care primary issuances and recent secondary market trades. The all-inclusive true interest cost for the Series 2022A Bonds was 5.11 percent.
The development and execution of a successful investor marketing campaign generated strong investor demand for the Bonds.
JMC conducted nine investor one-on-one calls; 41 investors reviewed the investor presentation and 54 viewed the preliminary offering document.
56 investors placed orders during the bond sale of which the majority were buy and hold investors.
The Series 2022A Bonds received ~$2.8 billion in orders, representing 18x oversubscription.
Significant oversubscription provided for aggressive repricing. Reoffering yields on the serial bonds were reduced 12-15 basis points and term bonds were reduced 23 basis points.
The Series 2022A Bonds are part of a broader plan of finance that includes a potential refunding of JMC’s existing 2013 Series A Bonds via a tax-exempt bank direct placement. H2C assisted JMC in evaluating a variety of structuring alternatives for the plan of finance, optimizing the financing structure based upon criteria established with JMC.
H2C assisted JMC in amending its existing master trust indenture originally drafted in 2013. Amendments to JMC’s master trust indenture reflect improvement to a variety of JMC’s bond security, collateral provisions and financial covenants.
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