Earthquake standards spur Bay Area hospital's $158 million bond sale
Marin General Hospital sold $158 million of revenue bonds to help complete a new hospital wing at the Northern California facility -- bringing it up to new earthquake safety standards.
The elected Marin Healthcare District Board of Directors approved the offering at an April 24 meeting and the bonds were priced May 8.
The funds will help complete a $535 million project to retrofit the 235-bed hospital in Greenbrae which began construction in 2016. The project is aimed at meeting healthcare and earthquake safety standards that take effect in 2030, said Jean Noonan, hospital controller.
“It’s a complete replacement project,” Noonan said.
The project includes a four-story, 260,000 square-foot replacement building, a five-story, 100,000 square-foot ambulatory service building and a new parking garage. The new building will include 114 private rooms, an expanded emergency department and six new operating suites.
The current building -- which opened in 1952 and was last modernized in the late 1980s -- will be converted to administrative and outpatient use.
A large portion of the project was funded by $394 million general obligation bond approved by voters in 2013 while another $50 million was raised through the hospital’s philanthropic foundation.
The revenue bonds will provide $91 million to complete the hospital replacement while $65 million will go to refund existing debt, Noonan said. They will be paid back over 27 years.
The bonds priced to yield between 2.33% for the 2024 maturity and 3.77% for the 2045 maturity.
The project is about 30 percent complete and the new hospital is expected to open in 2020, she said.
The deal was rated A-minus by Fitch Ratings and S&P Global.
“The stable outlook reflects the district's strong economy and large tax base (which is expected to continue to experience moderate growth), as well as the hospital's improved operating performance and liquidity,” an April Moody’s report stated.
The bonds were issued through the California Statewide Communities Development Authority. H2C Securities is the financial advisor.
Bond counsel is Orrick, Herrington, Sutcliffe LLP. The underwriters are Morgan Stanley & Co. LLC and Stifel Nicolaus and Co.