The hospital said it was requesting backing from the county to help it restructure and significantly reduce the interest rate on debt accumulated over the past few years because of, in part, a significant increase in uncompensated care, according to a press release from the hospital. The hospital had indicated that would have set aside funds to cover two years of principal and interest payments to minimize the county’s risk.
The debt accumulated because the hospital was unable to comply with several requirements associated with the bonds on account of credit-market issues and what the health system, in the press release, refers to as "timing."
The hospital currently has monthly operating expenses of $20 million and $48 million in reserves, with a required payment of $40 million at the end of December to lender SunTrust, according to The Atlanta Journal-Constitution’s report.
The commission explained that it denied backing the bond because of concerns over the hospital’s proposed plan for financing and the county’s financial stability, according to the report. The commission’s major concern is that if the hospital falls behind on payments, taxpayers will have to settle the debt. The commission is open to reconsidering its decision if the hospital develops a better plan, according to the report.
Read The Atlanta Journal-Constitution’s report on the denial of the Southern Regional bond request.
Read the press release on Southern Regional’s financial situation.
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