Through its financing, AGH sought to (1) refinance and consolidate seven outstanding long-term debt obligations in order to (1) realize debt service savings, (2) secure a long term credit commitment and (3) simplify its debt structure, and (2) fund up to $21 million of its “Vision 2020” strategic capital plan, which included a Regional Cancer Care Center and a new Women’s Health Center, and certain routine capital projects.
After reviewing and assessing its financing options with Wye River, AGH elected to negotiate terms of its financing with its existing lender, and with guidance from Wye River, was able to secure favorable terms. Using indicative pricing and term alternatives proposed by the lender, Wye River guided the crafting of a multi-series financing structure that was optimized to produce the lowest possible cost of capital. The 2017 financing included one bank-qualified bond series, two non-bank qualified bond series and a taxable loan. The bonds and taxable loan were structured as variable rate obligations and AGH entered into interest rate swaps to synthetically fix the interest rate on the bonds. As part of the 2017 Financing, AGH created an “Obligated Group” and entered into a new Master Loan Agreement with the Maryland Health and Higher Educational Facilities Authority, under which the 2017 Financing and any future parity debt of AGH will be secured. This new structure will enhance AGH’s ability to finance future projects or take advantage of refinancing opportunities without seeking the permission of its existing lenders.