CHICAGO — Toledo, Ohio-based Promedica Health System will begin pricing $270 million of refunding and new-money revenue bonds Thursday.
Barclays Capital is the senior manager and Wells Fargo Securities is the co-senior manager. Lucas County is the conduit issuer.
The finance team held retail sales Wednesday, and will take institutional orders Thursday. The transaction includes $249 million of new-money bonds and $21.5 million of refunding bonds.
Proceeds from the new-money debt will finance a variety of capital projects.
Promedica plans to follow this week’s sale with a refinancing set for the end of February. That offering will refund debt originally issued in 1998 and 2008, and the refunded bonds will be privately placed with a bank.
The sale comes a week after the Federal Trade Commission filed a pair of complaints against Promedica, which is the leading health care system in northwest Ohio, charging that its acquisition of St. Luke’s Hospital in Lucas County is anticompetitive and will allow Promedica to unfairly raise prices for services.
The FTC and the Ohio attorney general filed a separate complaint requesting a temporary restraining order and preliminary injunction against Promedica that would stop it from taking any steps toward integrating St. Luke’s until the court conducts a hearing and rules on the injunction request. The preliminary injunction would prevent Promedica from taking over St. Luke’s and would appoint an independent monitor to review compliance.
A hearing on the restraining order is scheduled for Thursday.
After the FTC filed the complaints, Promedica put out a supplement to its preliminary official statement for the bonds.
“Management of Promedica continues to believe that the joinder is beneficial to St. Luke’s and the community that it serves through higher quality of care, greater access, and lower health care costs, and plans to contest vigorously the allegations made by the FTC,” the provider said in the supplement. “Final resolution of this matter may not occur for several years.”
Promedica includes 11 acute-care facilities. St. Luke’s is in Lucas County, where Promedica operates three additional acute-care hospitals.
Credit analysts consider the St. Luke’s acquisition a strength, saying it will enhance the system over the long term while perhaps pressuring operating margins in the short term due to St. Luke’s large operating losses.
Moody’s Investors Service rates Promedica’s debt Aa3, and Standard & Poor’s rates it AA-minus.