The board overseeing the financing and construction of the new $1.2 billion public hospital in New Orleans to replace state-owned Charity Hospital has selected Kaufman, Hall & Associates as financial adviser for a proposed $400 million revenue bond issue.

The governing board of University Medical Center authorized chairman Robert Yarborough to negotiate a 150-day contract with Kaufman Hall.

Yarborough said proposals were received from nine firms and Kaufman Hall was picked from four finalists selected by an eight-member panel.

The new hospital is technically an affiliate of Louisiana State University and independent of the state — an arrangement proposed by Louisiana Gov. Bobby Jindal's administration so that bonds issued for the construction of the 424-bed facility do not count against the constitutional limit on state tax-supported debt.

Yarborough said that because University Medical Center is prohibited from receiving state appropriations, a cooperative endeavor agreement must be reached that would allow the state to pay Kaufman Hall's $300,000 fee.

At its first meeting in August, the board selected JPMorgan's health care division to prepare a business plan for the hospital and hired Causey, Demgen & Moore Inc. to develop an application to the U.S. Department of Housing and Urban Development for mortgage insurance on the hospital. The mortgage insurance would enhance the bonds, and is considered essential for the debt issuance.

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