DENVER (May 9, 2006) – A hospital, clinic and extended care center serving 12,000 square miles of rural eastern Montana soon will expand and modernize with $16 million in tax-exempt bonds issued today by Lancaster Pollard.
Sidney Health Center in Sidney, Montana, has strong liquidity and good historical operations. It recently became a Critical Access Hospital and now receives cost-based Medicare reimbursement that contributes to its financial strength.
Rural hospitals often have difficulty financing projects because of their size, distance from large financial markets and banks’ lack of understanding of their credit characteristics. Lancaster Pollard used its extensive experience with smaller hospitals’ finances and its access to a broad range of enhancement providers to highlight Sidney Health Center’s qualities and obtain a letter of credit from a provider well outside the hospital’s geographical area.
“The ‘A+/A-1’ letter of credit provides a low cost of capital for the hospital and favorable terms for long term growth,” Alan J. Spidel, Lancaster Pollard vice president, said.
The $16 million in bonds provides the majority of funding for a $19.4 million project that will modernize and expand the 25-bed hospital, the medical clinic and the adjacent extended care facility. Improvements include a physician lounge, a remodeled intensive care unit and an expanded surgery suite that will prepare the 1970s-era operating room for new digital technology. The adjacent extended care facility will add a physical therapy suite, remodel common areas, and expand and remodel the dementia care area. The medical clinic will be redesigned to be more efficient and to add space for future OB/GYN services.
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