Financing of Henry Mayo Newhall Hospital’s new patient tower reached a milestone Thursday with a $109.6 million bond sale.
Of that amount, $85 million is earmarked for the expansion. The balance will be used to refinance other existing debt on more favorable terms.
The tax-exempt bonds are issued through the California Public Finance Authority. The bond sale was underwritten by Ziegler Companies, Inc., a privately held investment banking firm based in Chicago.
Sale of the investment-grade bonds “shows that the investing community looks favorably at Henry Mayo as financially stable and solid,” said Bob Hudson, the hospital’s executive vice president and chief financial officer.
The new patient tower “will house 90 new private medical surgical rooms and 27 private rooms in our brand new women’s unit, for a total initial build-out of 117 new beds,” Jonathan Miller, Henry Mayo’s vice president of facility planning and support operations, told The Signal last fall. “We’ve also planned for expansion capacity of an additional 30 surgical private rooms.”
The new space will expand dietary services and include a new, larger cafeteria with indoor and outdoor dining areas. A new roof helipad will have a ramp to a dedicated elevator with direct access to the emergency department.
Construction began last fall on the $151 million patient tower, scheduled to open in 2019.
Henry Mayo currently staffs 238 general acute care beds and generates over $300 million in annual operating revenue.
The hospital is about to launch the public phase of a $25 million capital campaign, toward which it has already raised $6 million, said hospital spokesman Patrick Moody.
Henry Mayo, a not-for profit health system, has strong finances with “an outstanding credit profile,” said Mike Quinn, managing director in Ziegler’s healthcare finance practice, in a statement. He attributed this to the hospital’s payer mix, favorable local demographic trends, and “Henry Mayo’s enviable position as the only hospital in the Santa Clarita Valley.”
In the four-plus years the hospital has worked with Ziegler, “our relationship has allowed us to completely restructure our long-term debt to take advantage of our strong cash flow and patient demand in the Santa Clarita Valley,” Hudson said.
“Construction and completion of the patient tower is critical to the community and to the long-term financial health of the hospital,” he added.
Bernards Brothers Construction in San Fernando and the Los Angeles office of HMC Architects are working together on design and construction of the six-story, 160,000-square-foot building.
