Hospital, City approve bond
Published 4:52 pm Friday, February 24, 2017
By Brandon O’Connor
& Carolyn Iamon
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At their respective meetings Tuesday, the Hospital Authority and Bainbridge City Council each unanimously approved intergovernmental agreements to proceed with the closing of the recent bond sale.
Prior to approval, the Hospital Board was given the details of the bond resolution by Trey Monroe, Director of Stifel Merchant Capital Division, of Atlanta, who has been working out the details, along with local attorney Tom Conger. The 15-year bond was issued in two series, one totaling $9.33 million and one totaling $2.04 million for a total bond amount of $11.37 million. The interest rate on the bond is 2.99-percent.
“They were done through a private offering,” Monroe said of the sale. “We solicited offers from various financial institutions and chose the one that offered the lowest interest rate.”
The series totaling $9.33 million will be used to payoff existing debt and fund capital projects. The Hospital currently holds a little over $7 million is debt including $6.4 million owed to First Port City Bank and nearly $400,000 owed to People South Bank. The hospital will receive $2 million towards capital improvements including equipment upgrades and facility maintenance.
The $2.04 million from the second series of bonds, which is taxable, will payoff the hospital’s existing line of credit totaling just under $2 million. This will enable the hospital to redraw from the line of credit to meet cash flow needs.
Monroe said they had looked at offering the bonds publicly, but due to the number of entities involved, it would be difficult and the interest rate would have been 3.25 percent. The term of the bond has a committed rate, meaning the bank cannot accelerate the debt down the road.
“The buyer of these bonds can’t comeback in a couple years and demand payment in full,” Monroe said. “It is not subject to any acceleration unless the Hospital Authority, at the direction of the City or if there and is an economic advantage to doing so, would have the ability to refinance in the future.”
The Decatur County Board of Commissioners will vote on their portion of the bond agreement at their next scheduled meeting on Tuesday, Feb. 28. After the county approves the agreement, the documents must be validated by the Superior Court to meet Georgia finance statute. There is a hearing scheduled with the Superior Court on March 14 and the expectation is that the bonds will close on March 21.
“You think about, what would we do for a new industry coming to Bainbridge that said they were going to create 550 jobs,” City Manager Chris Hobby said. “We would do just about anything. I think that is what carried the day. Behind the name, behind Memorial Hospital and Manor stand 500 people and those people live here. It was absolutely necessary that we did everything we could that they be given an opportunity to thrive.”
Hospital CEO Billy Walker and other Authority members expressed appreciation to the City and County for their “amazing” cooperation in making this happen.
The board then approved the establishment of two bank accounts— one for the $2 million dollars designated for capital improvements, and the other for proceeds from the Georgia Heart Tax Credit.