WASHINGTON — The Internal Revenue Service is auditing bonds issued in 2006 by the Orange County Health Facilities Authority in Florida for the Orlando Regional Healthcare System, now Orlando Health, Inc.
The audit centers on $106.8 million of series 2006A hospital revenue bonds and $74.65 million of series 2006B hospital revenue bonds. It was disclosed in an event notice posted on the Municipal Securities Rulemaking Board's EMMA system on Thursday.
In the letter it sent in July informing the authority of the audit, the IRS said that it routinely examines municipal bond issues and has no reason at this time to believe that there are any tax-law violations associated with the bonds.
Orlando Health, Inc. also does not have any reason to think it has failed to meet any tax requirements, according to the event notice.
The series 2006A bonds were issued to advance refund bonds issued in 2002 and finance improvements to the Orlando Regional Medical Center. They were issued as auction rate securities but became series 2008B hospital revenue bonds after they were converted to the fixed rate mode, according to bond documents.
Goldman Sachs & Co., Morgan Stanley, and a SunTrust subsidiary were underwriters and broker-dealers for the 2006A bonds and reoffering agents of the 2008B bonds. Chapman and Cutler LLP was bond counsel.
The series 2006B bonds are fixed rate and were issued to finance some of the costs of constructing the Winnie Palmer Hospital for Children and Babies, according to the official statement for the bonds. They are still outstanding, according to the event notice.
UBS Investment Bank and Goldman Sachs were underwriters of the series 2006B bonds, and Chapman and Cutler was bond counsel.
Tax-controversy lawyer Brad Waterman, who is representing the authority in the audit, declined to comment.
