A Newark, N.J., bankruptcy court Tuesday approved St. Mary’s Hospital’s reorganization plan, a move that will now require New Jersey to pay $1.5 million per year through 2027 to help meet debt service payments on state contract bonds sold on behalf of the health care provider.

Under the reorganization plan, St. Mary’s will pay the New Jersey Health Care Facility Financing Authority $2.2 million annually until 2040 to help pay down the $45 million of state contract bonds it sold in 2007 as conduit issuer. That $2.2 million payment falls short of the $3.69 million of principal and interest payments owed each year on the Series 2007 bonds. New Jersey will now pay approximately $1.5 million each year, subject to appropriation, from its general fund to make up the shortfall.

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