Hammond Hanlon Camp LLC Advises Baptist Health on Financing Transactions Totaling $303 Million
posted on November 3, 2015
Hammond Hanlon Camp LLC (“H2C”), a healthcare-focused investment banking firm, served as the exclusive financial advisor and placement agent to Baptist Health (“Baptist”), Louisville, Kentucky, in connection with the direct placement of $284,435,000 of Series 2009B variable rate demand bonds ("VRDBs") and the negotiation of a forward commitment to purchase $18,704,500 of Series 2010 fixed rate bonds in December 2015.
H2C was retained by Baptist to assist in the identification and evaluation of prospective refinancing opportunities. Given the favorable capital markets environment, H2C recommended a competitive request for proposal (“RFP”) process for both letter of credit and direct purchase proposals. After a broad RFP process that included national, regional and local banks, the private offering was oversubscribed by approximately four times as H2C secured a large number of highly competitive credit commitments.
The results of the financing included: lowering Baptist’s cost of capital by 33 bps or $1 million annually; improving financial covenants and terms; increasing the tenor of the facilities from less than one year to ten years; and, by selecting three banks, maintaining diversification of primary credit relationships. Furthermore, placing the bonds in the bank market eliminated the daily and weekly put risk associated with VRDBs, and reduced refinancing risk.
“H2C worked with our management and Board to evaluate Baptist’s existing bank facilities and explain refinancing considerations and goals. H2C’s development, negotiation and execution of the financing allowed Baptist to achieve an extremely strong outcome with significant savings for the organization. H2C’s professional management of the process was also responsible for the completion of the financing within only one month from the selection of the banks,” stated Carl Herde, Chief Financial Officer of Baptist Health.
“H2C is very excited to have initiated a relationship with Baptist Health, as a leading health system in its region. Our engagement enabled Baptist to access capital in an unusually strong bank direct purchase market, while also achieving terms that will accommodate their future operating needs as a large and growing organization,” said Elaine Yao, Managing Director at Hammond Hanlon Camp LLC. Email Elaine
ABOUT BAPTIST HEALTH
Founded in 1924 in Louisville, Kentucky, Baptist Health is a full-spectrum health system dedicated to improving the health of the communities it serves and is one of the largest healthcare systems in Kentucky. The Baptist Health family consists of eight acute care hospitals (seven owned and one managed) and one joint venture long-term acute care hospital with a total of nearly 2,500 total beds; a physician network of approximately 3,000 employed and independent physicians; and more than 170 outpatient facilities. Its subsidiary, Baptist Health Plan, provides health insurance, managed care services and administrative services to employers, employees and their dependents, serving members in Kentucky and surrounding states.
ABOUT HAMMOND HANLON CAMP LLC
Hammond Hanlon Camp LLC (“H2C”) is an independent strategic advisory and investment banking firm committed to providing superior advice as a trusted advisor to healthcare organizations throughout the United States. H2C’s professionals have a long track record of success in healthcare mergers & acquisitions, capital markets, real estate and restructuring transactions, acting as lead advisors on hundreds of transactions representing billions of dollars in value. Hammond Hanlon Camp LLC offers securities through its wholly-owned subsidiary H2C Securities Inc., member FINRA/SIPC. For more information, go to h2c.com.
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"H2C’s development, negotiation and execution of the financing allowed Baptist to achieve an extremely strong outcome with significant savings for the organization.”
- Carl Herde
Chief Financial Officer
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