Kaiser Permanente won The Bond Buyer's 16th annual Deal of the Year award Wednesday night for its $4.2 billion sale which represented the largest aggregate financing by a 501(c)3 healthcare institution, the largest taxable issuance by a 501(c)3 healthcare institution, and the largest Green Bond issuance by any healthcare organization.
The California Health Facilities Financing Authority was the conduit issuer on the $2.1 billion tax-exempt component. Proceeds of the bonds were to be used to finance the San Diego Medical Center and other health care facilities, fund general corporate purposes, and refinance commercial paper.
"This year, our editorial board has selected a deal that, had it not yet been completed, would be under threat by the pending legislation in Washington," said Michael Scarchilli, Editor in Chief of The Bond Buyer, at the Dec. 6 gala. "It’s a milestone, record-breaking transaction that represented a triumphant return to the public markets after half a decade away."
The Oakland, Calif.-based Kaiser Permanente is the nation's largest not-for-profit healthcare system. It provides healthcare services across the nation through an integrated system of health plans, hospitals and physician groups that serve 11.7 members across eight states and Washington, D.C.
For 16 years, the editors of The Bond Buyer have selected outstanding municipal bond transactions for recognition. The 2017 awards, which were distributed at a ceremony at 583 Park Avenue in Manhattan, drew nominations that represent the diverse range of communities and public purposes served by the municipal finance market.
The other finalists were:
The Massachusetts Bay Transportation Authority’s $370 million issuance of sustainability bonds and bond anticipation notes. Proceeds of the offering, the first tax-exempt sustainability bonds ever issued in the United States, will go exclusively toward projects that benefit the environment or society more broadly.
The Fort Worth Transportation Authority’s first-ever transaction, a $325 million private placement to fund a commuter rail line that will alleviate traffic, provide much-needed rail service to Dallas-Fort Worth airport, connectivity to Dallas Area Rapid Transit’s rail system, as well as improving air quality.
The $1.3 billion inaugural financing from the newly-created Great Lakes Water Authority, among the most sizable water and sewer systems in North America. The sale unlocked substantial debt service savings for ratepayers and provided necessary funds for water system capital projects at an attractive borrowing rate.
The Kentucky Economic Development Financing Authority’s $472 million deal to benefit Owensboro Health. The sale represents the first new use of commercial bond insurance and first use of a surety in place of a Debt Service Reserve Fund in non-profit healthcare finance since the credit crisis a decade ago.
FAR WEST REGION
The Bay Area Toll Authority’s $1.9 billion sale as part of its San Francisco Bay Area Toll Bridge Seismic Retrofit Program. Over the past decade, BATA has completed more than $13.7 billion of bond financings and refinancings as part of the program, which has provided critical funding for retrofitting seven bay area bridges including the San Francisco-Oakland Bay Bridge.
The City of Cambridge, Mass.’ $2 million sale of minibonds, with minimum denominations of $1,000, to fund city-wide municipal and school projects. The minibond structure allowed Cambridge to respond to an unmet need of its residents, who regularly expressed interest in actively investing in capital projects throughout the city.
SMALL ISSUER FINANCING
The City of Missoula, Mont.’s $138 million sale of bond anticipation notes to purchase its water system from a private company. This was the inaugural financing for the city’s newly formed water enterprise and the culmination of over six years of legal battles to purchase the water system through Montana’s eminent domain statutes.