COLUMBUS, Ohio (June 20, 2006) – A city-owned Utah hospital that had to find financial resources independent of tax revenues was able to create an affordable long-term financing structure by working with Lancaster Pollard.
Beaver Valley Hospital originally financed its new facility with a balloon structure, in which the outstanding principal must be refinanced or paid in full at the end of a short term. When the loan came due, the hospital needed to refinance the $6 million to avoid financially stressing the hospital’s resources and those of its small, rural community. Initial attempts to refinance the balloon loan were challenging for the hospital.
As a specialist in financing community hospital capital projects, Lancaster Pollard used its expertise to succinctly analyze and articulate the hospital's credit characteristics relative to its peers and capital market expectations.
“Lancaster Pollard met a financial need that we were unable to meet with local resources,” said Craig Val Davidson, Beaver Valley Hospital administrator. “They brought a financial institution to the table that had initially turned us down, and Lancaster Pollard leveraged its national expertise and influence to help us obtain a very competitive proposal that will keep our hospital financially strong for the next 20 years.”
Beaver Valley Hospital’s new financing structure refinances the $6 million balloon loan with tax-exempt, fixed-rate bonds that will amortize over 20 years, resulting in a low, predictable cost of capital.
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