COLUMBUS, Ohio (Aug. 16, 2006) – An Indiana psychiatric center will expand its campus and services and save money with a $14.4 million bond issue underwritten by Lancaster Pollard.
Besides paying off Oaklawn Psychiatric Center’s higher-rate bonds, the tax-exempt issuance finances four expansion projects. The first is nearly complete; child and adolescent residents start classes this fall in a new Education Center that replaces a small modular complex. Today’s issuance also funds outpatient clinical office space and:
- The county’s first youth group home to assist in transitioning from inpatient mental health care to a home environment.
- A new adult group home. The existing group home will be converted to affordable housing for individuals with mental health issues.
Financing the projects allowed the center to start construction immediately rather than fund a construction loan or await the collection of pledges from its capital campaign.
Lancaster Pollard secured a cost-effective letter of credit from an internationally-affiliated bank by detailing Oaklawn’s unique mix of Medicare, Medicaid and grant revenue to illustrate recurring cash flows and financial stability. This precise credit articulation helped reduce Oaklawn’s interest rate by 4 percentage points, allowing it to better leverage its 501(c)3 status and save an estimated $4.5 million over the term of its outstanding debt. The bonds include an interest rate swap to lock in an all-in cost of capital below 4.65%.
“This really enhances the program elements and fills in some gaps that we knew existed, so we’re really pleased about that,” Chief Executive Officer Harold Loewen said.
The nonprofit psychiatric center is affiliated with the Mennonite Health Services Alliance and has been a leading provider of mental health services for nearly 60 years.
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