Woman’s Hospital of Baton Rouge hopes to sell bonds soon so it can proceed with a revised hospital replacement project that it deferred earlier this year due to a slack credit market.
The hospital had planned to sell $350 million of tax-free revenue bonds to build the new facility. However, it halted work on the project in January when its financial team said the bonds could not be sold at an acceptable interest rate due to poor market conditions.
Hospital advisers said the January sale would have resulted in an interest rate of 8.5%, well above the 7% rate used to develop the financial plans for the new facility.
The revised project has a smaller area and scales back the number of beds to 164 from the original 176 and cuts neonatal beds to 84 from 96.
Hospital spokeswoman Jodi Conachen said the revised proposal is expected to cut the cost for the new facility by $35 million to $50 million.
The Louisiana State Bond Commission in November 2008 approved a request from the Woman’s Hospital Foundation for $350 million of hospital revenue bonds to be issued by the Louisiana Community Development Authority. In December 2008, the foundation received a $100 million allocation of Gulf Opportunity Zone bonds for the hospital project.
The hospital intends to finance the entire project with revenue bonds, but opted to seek an allocation of GO Zone bonds because of their more flexible rules on how the proceeds can be allocated.
The hospital’s existing debt is rated A by Standard & Poor’s and A1 by Moody’s Investors Service.
