Cleveland-based MetroHealth System reported bonds for its campus transformation project garnered a strong reception in the investment market.
In total, MetroHealth priced $945.7 million in hospital revenue bonds for the project, and more than 120 accounts (funds, banks, firms and individuals) put in $4.3 billion in orders for the Series 2017 fixed-rate hospital revenue tax-exempt bonds, the health system said in a news release.
MetroHealth said the highly competitive issuance of the bonds, which have a 40-year final maturity and average life of approximately 28 years, led to an all-in true interest cost for the bonds of nearly 5 percent.
"Not only is this an important validation of the success we've earned with our strategy, recent growth and operating performance improvements, it's proof of the industry's belief in MetroHealth and the path we're taking," Akram Boutros, MD, president and CEO of MetroHealth, said in the release.
As part of its transformation project, MetroHealth said it plans to construct a new 12-story hospital building, a parking garage with room for 1,200 to 1,500 cars and a central utility plant.
The health system said Cuyahoga County is supporting the campus transformation by obtaining a letter of credit to create a $64 million debt service reserve fund. Additionally, MetroHealth said it self-financed more than $90 million for the first phase of the campus transformation, including the 2015 demolition of the North Coast Behavioral Health building and last year's vertical expansion of the critical care pavilion.