A month after it was forced to purchase a chunk of its own debt when it was unable to access the frozen credit markets, a Kalamazoo-based hospital plans to try again early next month.
The Kalamazoo City Commission last week approved a measure for Bronson Methodist Hospital to refund up to $215 million in revenue bonds. The bonds will be issued through the Kalamazoo Hospital Finance Authority.
Proceeds will be used to refund two series of fixed-rate bonds insured by MBIA Insurance Corp. and two series of variable-rate demand bonds originally sold in 2005 and 2006. The 2006 variable-rate debt was insured by Financial Security Assurance. Proceeds will also be used to unwind all outstanding swaps associated with the debt.
The move comes a month after Bronson Methodist was forced to ask its parent company to purchase $40 million of debt that was about to convert into the auction-rate mode, and take out an emergency $20 million bridge loan to purchase another chunk of debt when it was unable to refund it due to the frozen credit market.
The upcoming transaction is tentatively planned for the first week of December. Ziegler Capital Markets is Bronson’s underwriter.