New Jersey's coffers will feel the effects of St. Mary's Hospital's bankruptcy proceedings, as the state will pay on Sept. 1 a $1.06 million debt service payment on $45.4 million of state contract bonds, with no reimbursement from the hospital on the horizon.

The Series 2007 bonds are part of New Jersey's Hospital Asset Transformation Program in which the state pays debt service costs if bond proceeds will facilitate the closing of an acute-care facility. The program is designed to reduce vacant hospital beds throughout the state.

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