City of Hope received approval Tuesday from the Illinois Finance Authority to refund up to $650 million of bonds sold last year to refinance a taxable bridge loan for its purchase of Cancer Treatment Centers of America facilities in Illinois, Arizona, and Georgia.
The refunding was among $1.3 billion in conduit financings approved by the authority at its meeting Tuesday.
California-based nonprofit City of Hope will place the tax-exempt or taxable refunding bonds that will carry a maximum final maturity in 2063 with Bank of America, which also purchased the 2022 bonds, according to IFA documents.
City of Hope
The acquisition of the Cancer Treatment Centers contributed to City of Hope rating downgrades to A with a negative outlook from A-plus by S&P Global Ratings in December and to A3 from A2 by Moody’s Investors Service in January.
S&P cited “the significant increase in leverage following the acquisition of Cancer Treatment Centers of America, as well as significantly lower pro forma unrestricted reserves to long-term debt and days’ cash on hand.”
Another acquisition-related financing approved by the Illinois authority involves up to $250 million of bonds for The Carle Foundation’s purchase of three UnityPoint Health hospitals located in Illinois and other assets, according to a presentation prepared by IFA Vice President Sara Perugini. Illinois-based Carle, which has underlying ratings of AA-minus from S&P and Fitch Ratings, plans to sell the debt directly to Bank of America.
Up to $125 million of tax-exempt private activity bonds were approved for LRS Holdings to finance or refinance solid waste disposal facilities, according to a presentation prepared by IFA Senior Vice President Brad Fletcher. The unrated bonds will be offered through J.P. Morgan Securities at a fixed interest rate during an initial period and can be converted to daily or weekly interest rate periods.
The board also authorized the issuance of up to $250 million of bonds under the Property Assessed Clean Energy, or PACE program, on behalf of new capital provider CleanFund, LLC.
Illinois law allows commercial property owners to enter into assessment contracts with local governments to finance or refinance energy efficiency, renewable energy, and water conservation projects through the issuance of PACE bonds.