Founded in 1962, Oroville Hospital (the “Hospital”) has grown from a modest community hospital into a 153-bed acute care facility specializing in a broad range of inpatient and outpatient services, including multiple physician practices. The Hospital is a private, non-profit corporation serving the citizens of the Oroville area and Butte County, California. With a medical staff of more than 130 physicians, Oroville Hospital prides itself on providing the highest quality medical care in a friendly and compassionate environment.
Solution and Execution
GATES Capital was engaged to structure and offer a $15 million 25-year tax-exempt bond issue through the California Municipal Finance Authority for the purpose of (i) refunding the Hospital’s Series 1997 Revenue Bonds, (ii) financing certain capital projects, and (iii) financing the cost of issuance related thereto.
GATES Capital’s financing strategy included the solicitation of commercial banks interested in the provision of a direct-pay letter of credit to additionally enhance the bonds. GATES Capital conducted a competitive letter of credit bank RFP process, introduced numerous new banks to the Hospital and negotiated a market rate credit enhancement package that lowered the Hospital’s interest rate while producing acceptable terms, covenants and conditions. In addition, GATES Capital provided advisory services with respect to the procurement and implementation of a 5-year interest rate cap on the bonds.