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Enloe Medical Center’s bonds sell in two hours
A second offering is planned next week
CHICO, Calif., Aug. 1, 2008 – Enloe Medical Center completed the sale of the first of two municipal bonds offerings on Tuesday, July 29, 2008. The bonds, which sold in two hours after more than a week of marketing to investors, were valued at $68.9 million. The second offering of bonds, valued at $175 million, is scheduled to sell on Tuesday, Aug. 12, 2008.
“The quick sale of the first bonds, under the Cal Mortgage Program, illustrates that Enloe is viewed strongly in the marketplace,” said Enloe’s Chief Financial Officer Christine Sarrico.
The bonds that sold on July 29, called Series 2008A, were purchased by individuals in the public and by institutional accounts. These bonds refinance debt from a previous bond. The bonds to be sold on Aug. 12, called Series 2008B, will help fund the Century Project, Enloe Medical Center’s expansion. All of the bonds, offered at a variety of term dates, are being sold through Merrill Lynch, A.G. Edwards, Morgan Stanley, Raymond James and UBS. A copy of the Preliminary Official Statement describing the bond offering is available through these brokers.
In August, the bonds will be issued through the California Statewide Communities Development Authority andinsured by the Cal Mortgage Program, a division of the State of California's Office of Statewide Health Planning and Development.The Cal Mortgage guaranteeis expected toresult in a rating on the bonds ofA+ by Standard & Poor's, the same credit rating as the state. Enloe will begin making payments on the bonds in 2009 and will pay back the amount in full by 2033 for the first bonds and 2038 for the second bonds.
The Enloe Century Project is expected to cost $132 million. In addition to bonds, a large committee of community members has been heading a $10 million capital campaign to assist in funding the expansion; and the sale of Enloe’s former Bruce Road property will provide the balance of the cost for the Enloe expansion. Under the leadership of Steve Nettleton, the capital campaign committee has so far raised more than $7.6 million dollars.
The Century Project expansion includes a new five-story patient tower that will more than double the square footage of the current facility, a parking structure for employees and physicians and a community park. The patient tower is currently under construction and is expected to be completed by 2011. The parking structure, for employees and physicians, is scheduled to open at the end of August. The community park construction will begin when the patient tower is complete, and should take six months.
State requirements mandate that Enloe and all acute care hospitals in California retrofit, rebuild or close their general acute care inpatient hospital buildings by specific dates if they do not meet strict new seismic safety standards. At Enloe, this would mean relocating several patient care areas out of the oldest area of the current facility, which would further limit space in the already well-occupied hospital. The
Century Project expansion will allow Enloe to move these areas to the new tower; and the historical part of the hospital, built in 1937, will be used exclusively as office space.
Enloe Medical Center is a local, nonprofit health care organization. For more information, please call 530/332-7300 or visit us online at http://www.enloe.org. Enloe Medical Center is located at 1531 Esplanade Chico, Calif. 95926.