H2C CLIENT TRANSACTIONS

H2C Leads $458.1 Million Financing for WakeMed Health and Hospitals

August 2022

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NEW YORK — H2C Securities Inc. (“H2C”), a strategic advisory and investment banking firm, served as the exclusive financial advisor to WakeMed Health and Hospitals (“WakeMed”) on a $300 million taxable public financing and a $158.1 million direct placement in Winter 2021.

Over the past few years, H2C has been monitoring the debt capital markets and advising WakeMed on its debt structure, with particular focus on its $206.5 million fixed rate Series 2012A Bonds, callable on October 1, 2022, and its $158 million variable rate Series 2019B and 2019C Bonds.

On March 5, 2020, in anticipation of a future issuance, H2C worked with WakeMed to enter into a Treasury Rate lock at a benchmark UST rate of 1.7735 percent.

In November 2021, WakeMed engaged H2C to advise on refinancing options for the Series 2012A, 2019B, and 2019C Bonds. Given the rising interest rate environment, WakeMed sought to simultaneously refund the Series 2012 Bonds and convert the Series 2019B and Series 2019C Bonds to fixed-rate bonds. H2C ran a comprehensive RFP process and received strong interest from multiple banks for the mode conversion of the Series 2019B and Series 2019C Bonds.

H2C quarterbacked the two transactions that allowed WakeMed to take advantage of historically low rates by closing the conversion of the Series 2019B and Series 2019C Bonds in six weeks. In December 2021, WakeMed converted the Series 2019B and 2019C Bonds from variable-rate demand bonds to a fixed-rate direct placement with attractive rates of 1.72 percent and 1.69 percent, respectively.

In January 2022, WakeMed advance refunded the Series 2012A Bonds with taxable, fixed-rate Series 2022 Bonds. The Series 2022 Bonds generated:

  • NPV savings of $43.2 million, or 20.9 percent of refunded par 

 

  • Cash flow savings from FY 2022 to FY 2039 of $179.1 million o All-in TIC of 3.06 percent

 

  • All-in TIC of 3.06 percent

  • $98 million in new-money bonds

In addition, when the rate lock was unwound in conjunction with pricing the Series 2022A Bonds, WakeMed was “in the black” by 37 bps, resulting in a favorable settlement of $16.1 million, which allowed WakeMed to increase the size of the project fund. H2C also worked diligently with the WakeMed finance team to improve WakeMed’s covenants in a new and amended master trust indenture and a new bank continuing covenants agreement.

About WakeMed Health and Hospitals

Serving the community since 1961, WakeMed Health & Hospitals is the leading provider of health services in Wake County, North Carolina. As the largest health system in the state’s largest county, WakeMed plays an active role in making our community the best place to live, work and raise a family. We greatly enhance the economic viability of Wake County through competitive wages for our nearly 12,000 employees and providers and through the goods and services we purchase. As both a community asset and a community leader, WakeMed continues to reinvest in our people, facilities and services to improve access for the entire community. Find out more at wakemed.org.

About H2C Securities Inc. ("H2C")

 

H2C is a strategic advisory and investment banking firm committed to providing superior advice to healthcare organizations, higher education institutions, and related organizations throughout the United States. H2C’s professionals have a long track record of success in mergers and acquisitions, capital markets, and real estate transactions, acting as lead advisors on hundreds of transactions representing billions of dollars in value.

Securities and services offered through H2C Securities Inc., member FINRA/SIPC, a registered broker-dealer and an indirect subsidiary of Fifth Third Bank, National Association. All rights reserved. Securities and services offered through H2C Securities Inc.: Are Not FDIC Insured; Offer No Bank Guarantee; May Lose Value; Are Not Insured by any Federal Government Agency; Are Not a Deposit. 

For more information, visit h2c.com