Case Study:Union Hospital of Cecil County

106 Bow Street Elkton MD, 21921

Union Hospital is an award-winning, non-profit, full-service community hospital located in Elkton, Maryland. Nationally recognized for clinical excellence in the treatment and prevention of disease, the Hospital is dedicated to providing superior, personalized, quality health care to its neighbors, families and friends in Cecil County and neighboring communities.

Project Overview

Wye River Group has been financial advisor to Union Hospital since 2011 when it was engaged by the Hospital to assist with the planning and implementation of the refinancing the Hospital’s Series 2000, 2002 and 2009 Bonds for debt service savings.  In 2014, the Hospital, with the assistance of Wye River, again pursued an opportunity for debt service savings through the refinancing of its Series 2005 Bonds. In between financing events, Wye River has served as advisor to the Hospital in connection with capital and strategic planning activities.

Financing Overview

In connection the Union Hospital’s Series 2012 Bonds (which refinanced its Series 2000, 2002 and 2009 Bonds), the Hospital worked with Wye River Group to assess benefits and risks of the various financing alternatives available to it and ultimately elected to conduct a competitive solicitation for bank-based financing. As part of the financing, the Hospital and Wye River sought to preserve the “bank-qualified” status of the Series 2000 and 2009 Bonds to the extent that it could lower the cost of borrowing for the Hospital. Wye River coordinated the solicitation for the Hospital and secured 7 financing proposals with a spread between the highest and lowest quoted interest rates of more than 50 basis points.  After thorough analysis of the proposals, the Hospital selected a lending partner, and Wye River guided the crafting of a multi-series financing structure that (1) preserved the bank-qualified status of the refunded bonds, (2) included a new bank-qualified allocation for a portion of the financing (3) allowed for the release of a debt service reserve fund securing the Series 2002 Bonds and (4) produced considerable interest cost savings.

In 2014 the Hospital sought to advance refund its Series 2005 Bonds for savings.  After carefully examining its financing alternatives with the assistance of Wye River Group, Union Hospital again elected to pursue a bank-based financing through a competitive solicitation process. The Hospital received 8 financing proposals.  Interestingly the most compelling proposal was not from the Hospital’s 2012 lender.  The Hospital was able to secure a 15 year interest rate commitment and annual debt service savings of more than $500,000 per year.

Wye River Group’s Role

Throughout Wye River Group’s ongoing engagement, we have been fortunate to provide a wide range of services to Union Hospital, including:

  • Assessment of financing alternatives and identification of opportunities for debt service savings
  • Financial modeling and capital planning consultation
  • Assessment of historical and projected debt capacity
  • Review of financing alternatives
  • Negotiation of final terms with selected lenders
  • Development of the Plan of Finance for each financing
  • Optimization of financing structure
  • Coordination and implementation of financing
  • Ongoing advisory work

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