The proceeds of the Ginnie Mae collateralized 19-year fixed rate loan advance refunds MMH’s outstanding municipal bonds and will produce a reduction of $380,000 in MMH’s 2013 interest expense and total debt service savings of $5 million.
MMH retained InnoVative Capital in the summer of 2012 enhance its cash flow through refinancing or restructuring the hospital’s Series 2005 tax-exempt bonds.
“I cannot overemphasize the profound impact this refinancing will deliver to Morehead’s bottom line and its ability to reinvest in our hospital and its personnel. An opportunity like this is rare for a community hospital,” said W. Carl Martin, CEO of MMH, in a statement “To lower our interest rate by almost one-percent, improve our twelve-month cash flow by $630,000, and produce debt service savings of $240,000 per year for each of the next 19 years, without any increase in our loan amount or cash outlay is the ultimate win-win.”
More Articles on Hospital Refinancing:
Overlooked? Refinancing Options via FHA
2013 Interest Rate Outlook
4 Drivers of Healthcare Capital Financing — And How They Affect CFOs
