BRADENTON, Fla. — The Louisiana State Bond Commission yesterday approved a $350 million revenue bond deal for the Woman's Hospital Foundation Project, of which $100 million will be Gulf Opportunity Zone bonds.
Proceeds will finance some or all of a 520,000-square-foot medical center with approximately 300 beds, two medical office buildings, an energy plant, and a support-services building in Baton Rouge.
The original application was first approved last year but the financing was delayed due to market volatility.
Construction was halted in January when the bonds could not be sold because of high interest rates, hospital chief executive officer Teri Fontenot told the commission yesterday.
"We have $50 million invested in the ground already," Fontenot said, adding that hospital officials are "rescaling the project" and anticipate restarting construction in 2010.
Although ratings for the upcoming bond sale have not been released, the proposed transaction prompted Standard & Poor's in February to lower its rating to BBB-plus from A on $30.8 million of Series 2005 bonds issued for Woman's Hospital by the Louisiana Public Facilities Authority.
Moody's Investors Service last November placed its A1 rating for Woman's Hospital on watch for possible downgrade when the replacement hospital transaction was initially reviewed. Moody's removed the rating from watch in April because of the delay in selling the bonds, but placed a negative outlook on the credit.
The project will provide a replacement hospital for the 40-year-old nonprofit Woman's Hospital, a specialty facility for obstetric, gynecological, and neonatal services serving women and infants throughout Louisiana. The hospital also operates wellness and outpatient centers outside the primary facility as well as mobile mammography units.
No details were available about when the $350 million bonds would be priced. Kaufman, Hall & Associates Inc. is financial adviser and Merrill Lynch & Co. is the book-runner. The Long Law Firm LLP and Foley & Judell LLP are co-bond counsel on the transaction.
The Bond Commission also gave final approval for the sale of $80 million of GO Zone bonds to finance the construction and equipping of a chemical production plant in Geismar.
GO Zone bonds are tax-exempt private-activity bonds approved by Congress in 2005 to help Gulf Coast states with hurricane recovery efforts. Louisiana received an allocation of $7.94 billion.
The commission also gave initial approval for the state to competitively sell in several series approximately $500 million of new general obligation bonds and to refund $230 million of bonds. Those deals will be considered for final approval in an upcoming commission meeting.