Hospital to save $15M by refinancing
North Valley Hospital is refinancing
about $25 million worth of debt incurred during the construction of
the hospital through the use of tax-exempt bonds. The financial
move will allow to hospital to retire its debt five years sooner
and save nearly $15 million.
North Valley is moving the loan from
out of state to three local banks. The Montana Facility Finance
Authority has approved a request by the hospital to issue
tax-exempt bonds which will be purchased by Glacier Bank, First
Interstate Bank and Rocky Mountain Bank.
Normally, these financing arrangements
are used to fund initial construction. North Valley, however, is
using the opportunity to lower debt costs. The savings will be used
to bring new and improved services to the North Valley campus.
“This is a win-win situation for
everyone,” said Jason Spring, North Valley Hospital CEO. “With
interest rates declining, it makes perfect sense to refinance. The
fact that we can convey a sizeable opportunity to our local banks
means that we can also benefit our local community.
“The savings that the hospital can
enjoy over time will allow us to bring additional needed health
services and maintain the wide variety of financial and in-kind
support we provide to other area nonprofits and community
organizations.”
Last year, North Valley realized more
than $19M in charity care, other uncompensated health care,
contractual discounts and community health care education, support
and funding. The hospital and its outreach clinics are also one of
the largest employers in the Whitefish area with 339 employees.
Local financial institutions will have
obvious benefits from the refinancing plan.
“Glacier Bank working together with
First Interstate Bank, Rocky Mountain Bank and the Montana Facility
Financing Authority is very pleased to have an opportunity to work
with North Valley Hospital to refinance its facilities,” said
Dennis S. Beams, executive vice president of Glacier Bank. “North
Valley Hospital provides world-class service and we’re proud to
work with this outstanding organization for the betterment of the
community.”
David Dittman, president of First
Interstate Bank in Whitefish, added, “We are extremely pleased to
take part in the cooperative effort to assist North Valley Hospital
in its mission of providing first-class health care in this
competitive environment.
The North Valley Hospital facility and
their other properties in Whitefish, Columbia Falls and Eureka will
be mortgaged to secure the bonds.
The 82,352 square-foot North Valley
Hospital opened in 2007. A $30 million mortgage loan to finance
construction was approved in 2005 by the Department of Housing and
Urban Development.