The California Health Facilities Financing Authority granted the Downey Regional Medical-Center Hospital permission at its Sept. 29 board meeting to proceed with negotiations to sell its outstanding bonds to a private purchaser to enable it to exit bankruptcy in mid-November.
In 1993, Downey Hospital, a 199-bed nonprofit full-service hospital located in Los Angeles County, issued $68.8 million of revenue bonds through the CHFFA, according to authority documents. Of that, $16.4 million are currently outstanding.
Downey sought approval from the authority to amend its existing indenture and loan agreement so it could purchase all of the outstanding bonds and sell them to RCB Equities #1, the company providing exit financing. Union Bank will serve as successor trustee for the taxable bonds.
The CHFFA’s staff concluded in its report that it was desirable to assist Downey to secure the exit financing it needs to undo the bankruptcy by authorizing the amendment to the bond terms.