Grand River Health locks in 20-year interest rate
After winning approval from district voters in November’s election, Grand River Health is ready to move forward with its hospital expansion and new senior center after locking down the bond interest rate at 3.549 percent this month.
“We were very happy with our final interest rates, as the last few weeks leading up to pricing saw considerable gains in global stock markets and confusion about the future direction of U.S. interest rates,” said Grand River Health CEO Jim Coombs.
Working with bond underwriter George K. Baum & Company of Denver, Grand River Health took advantage of historically low interest rates and sold tax-exempt bonds with a true interest cost of 3.549 percent for the $89,400,000 bond issue, states the press release.
“Although voters approved the bond issue by a 67 percent margin back in November,” explained George K. Baum & Company Senior Vice President Todd Snidow, “waiting until the interest rate markets calmed down in January enabled Grand River Health to get lower rates than if we had sold them in late December.”
The 20-year bond issue was sold with a 10-year call feature, according to the press release.
“We are delighted to be locking in these rates for the project and getting our construction projects going before building costs increase,” said Board of Directors President Kip Costanzo.
Voters approved the project with nearly 67 percent of the vote in November, with 3,278 in favor to 1,652 against.
As a result, Rifle’s E. Dene Moore Care Center will be torn down and replaced and Grand River Hospital expanded.
“We are pleased to report to local taxpayers that the bond issue was well received and we were able to do much better than the numbers approved by voters in the ballot question,” said Chief Financial Officer Christina Bolin. “We think that taxpayers should see an increase that is less than the $34 per $100,000 of home value communicated during our outreach.
“In fact, the total repayment cost of the bonds is more than $7 million less than what voters approved in November, due to the insured credit rating and low interest rates.”