The new Section 242/223(f) program provides a compelling alternative available to not-for-profit hospitals to refinance their existing debt...
Chicago, IL (PRWEB) August 21, 2014
Ziegler, the premier investment bank to community and regional healthcare providers nationwide, is pleased to announce the successful closing of the $51.3 million refinancing of Coosa Valley Medical Center (CVMC) through Ziegler’s Financing Corporation (ZFC), the FHA-insured mortgage lending arm of Ziegler. This transaction represents the first FHA Section 242/223(f) community hospital refinancing transaction in the country under HUD’s new regulations issued in 2013.
Coosa Valley Medical Center is a 248-bed, not-for-profit, acute care hospital located in Sylacauga, Alabama. In 2005, the Ziegler Healthcare Investment Banking team led by John Hanley, assisted CVMC in the issuance of the Series 2005-A Bonds. CVMC had approximately $50 million in outstanding tax-exempt bond debt with an average interest rate of 6.0%. By analyzing the options, including the issuance of tax-exempt debt through the capital market and private placement markets, Ziegler identified the use of FHA Section 242/223(f), a new program offered by HUD. Ziegler’s Healthcare Investment Banking team worked alongside ZFC through the FHA process, which lead to a new mortgage loan underwritten by ZFC. CVMC’s new financing has a 25-year term with a fixed rate of just over 4%.
ZFC’s extensive knowledge and experience with HUD programs available to healthcare systems created great value for the borrower. With the new loan structure, CVMC was also able to capitalize on approximately $792,000 for its hospital renovations in addition to lowering its annual debt service costs by up to $677,000. The entire recapitalization provided a solid foundation for future growth and success at CVMC.
“Ziegler was instrumental in guiding us through the new FHA Section 242/223(f) refinancing program, allowing us to partner with HUD and take advantage of the low, fixed interest rates available in today’s market,” stated Glenn Sisk, Chief Executive Officer of CVMC. “With this refinancing, we were able to significantly lower our debt service which will provide a solid foundation for CVMC’s future growth in the ever-changing healthcare environment.”
Bill Mulligan, President of ZFC stated, “The new Section 242/223(f) program provides a compelling alternative available to not-for-profit hospitals to refinance their existing debt.” Bill continued, “The Section 242 team at HUD is very knowledgeable about the dynamic nature of acute care hospital operations and was very professional throughout transaction processing.”
Ziegler was represented by Krooth & Altman LLP in the transaction.
By tailoring financial solutions for its clients nationwide, Ziegler’s objective is to present an array of financial solutions to the healthcare community. Through its ZFC arm and specific focus on healthcare, we offer a broad product mix, including mortgage loans insured by the Federal Housing Administration for the acquisition, refinancing, construction and mortgage add-ons of hospitals, as well as investment banking, financial risk management, M&A, and capital and strategic planning services.
For more information about Ziegler and FHA specifically, please visit us at http://www.Ziegler.com/fha or contact Bill Mulligan [bmulligan(at)ziegler(dot)com] or John Hanley [jhanley(at)ziegler(dot)com].
The Ziegler Companies, Inc. (PINKSHEETS: ZGCO), together with its affiliates (Ziegler), is a specialty investment bank with unique expertise in complex credit structures and advisory services. Nationally, Ziegler is ranked as one of the leading investment banking firms in its specialty sectors of healthcare, senior living, religion, and education, as well as general municipal and structured finance. Headquartered in Chicago, IL with regional and branch offices throughout the U.S., Ziegler provides its clients with capital raising, corporate finance, FHA/HUD, strategic advisory services and research. Ziegler serves institutional and individual investors through its wealth management and capital markets distribution channels.
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