The Rhode Island Health and Educational Building Corp. sold more than $1 billion in bonds for fiscal 2017, marking its first such milestone in its 51-year history.
Its competitive sale of $141 million in tax-exempt revenue bonds for Brown University in late June put it over the top.
“It’s been quite a year,” said Robert Donovan, the corporation’s executive director since 1993. “We definitely handled a greater amount of refundings this year than in the last couple of years.”
The corporation focused on new capital construction later in the year.
Since its inception in 1966, the agency has issued 350 bond deals totaling $8.5 billion.
During FY17, which ended June 30, it provided $1.02 billion in financing to eight health care and educational institutions, 12 municipalities and three regional school districts. It provided $777.5 million in refinancing and $242.5 million for new construction projects.
The corporation issued financings for Lifespan and Care New England, the state’s two major hospital networks. Other refinancings went to Brown; the University of Rhode Island; Villa at Saint Antoine/the Frassati Residence; New England Institute of Technology; the communities of Woonsocket, Cranston, Cumberland, North Smithfield, Tiverton, Scituate, Narragansett, and the regional school districts of Bristol-Warren, Exeter-West Greenwich, and Foster-Glocester.
It financed $119 in new construction projects in Barrington, Cranston, Middletown, Newport, Pawtucket, Tiverton and Warwick. The agency also assisted with $123.5 million in financings for new construction projects at URI, Brown, Providence College and Roger Williams University.
“Clearly, one of the deals we felt good about was a refunding for the city of Woonsocket,” said Donovan. A $58.9 million refunding saved $4.3 million for the 41,000-population city. “Woonsocket is a challenged community in terms of its financial wherewithal, so every dollar we passed to them was a benefit.”
Three consecutive upgrades by Fitch Ratings, its most recent in June to BBB-plus with a positive outlook, lifted Woonsocket to two levels above junk. Moody’s Investors Service last September elevated the city’s bonds to still-speculative Ba3 and in February revised its outlook to positive from stable.
Fitch last week dropped Care New England, the state’s second-biggest hospital group, two notches to junk-level BB from BBB-minus, and put it on credit watch.
Donovan said his agency is already working on $203 million in financing for new construction projects at URI, Portsmouth Abby School and Meeting Street, and for school construction projects in North Providence, Warwick, Cranston, and for the Chariho School District.
The state General Assembly created the corporation in 1966. Its first financing, for $1.6 million, was for a physical education building and other campus renovations on behalf of Barrington College, a biblical school since closed.
Two years later the corporation began to assist nonprofit health associations, cooperative hospital service organizations and a broad range of nonprofit healthcare and educational providers.
In 2003, the agency’s statewide role expanded when lawmakers made it the designated issuer of bonds for school projects by cities and towns eligible for state aid.
Health and education today are the state’s largest employment sectors, accounting for 22% of the Rhode Island workforce.
“There will be continued demands for financing in these sectors,” said Donovan.