UMC of El Paso seeks $25M line of credit from Wells Fargo

Officials of University Medical Center of El Paso (Texas) are seeking approval from the County Commissioners Court to gain a $25 million line of credit from Well Fargo Bank for supplemental working capital, according to the El Paso Times.

The request comes as the end of the year nears. The line of credit, also referred to as a tax anticipation note, might be needed to provide the hospital with working capital until it receives tax revenues in early 2017, according to the report.

Ryan Mielke, a spokesperson for UMC, described the request to the Commissioners Court as precautionary, as the loan cannot be obtained from the bank without the approval of the UMC board of managers and the Commissioners Court.

"That allows us to have that safety vault," Mr. Mielke said, according to the report. "It's something that makes fiscal sense. It's a prudent thing for the hospital to do and it ensures hospital operations ...  in any scenario continue."

In late 2015, the hospital entered into a $20 million tax anticipation loan agreement, from which it drew approximately $7 million that was repaid in less than 10 days, Mr. Mielke told the El Paso Times. The money was needed to fulfill a payment related to the El Paso Children's Hospital bankruptcy case.

This is the fourth consecutive year that UMC has sought approval to obtain a tax anticipation loan, according to the report. 

The hospital doesn't expect to need to use the funds if it receives approval for the $25 million line of credit, according to the report. The Commissioners Court is scheduled on Monday to vote on whether the hospital should get the line of credit.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars