$150+ million issued on behalf of jfk medical

7/31/2019 $150+ Million Issued on Behalf of Jfk Medical

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Press Release

For More Information Contact the NJHCFFACommunications Department:609-292-8585 X142For Release: June 19, 2009

MARK E. HOPKINSEXECUTIVE DIRECTOR

CONTACT: Stephanie BilovskyPHONE: 609-292-8585Date: June 19, 2009

APPROXIMATELY Press Release

For More Information Contact the NJHCFFACommunications Department:609-292-8585 X142For Release: June 19, 2009

MARK E. HOPKINSEXECUTIVE DIRECTOR

CONTACT: Stephanie BilovskyPHONE: 609-292-8585

Date: June 19, 2009

APPROXIMATELY $150+ MILLION ISSUED ON BEHALF OF JFK MEDICAL CENTER THROUGH THE

HOSPITAL ASSET TRANSFORMATION PROGRAM

(Trenton) On June 18, 2009, the New Jersey Health Care Facilities Financing Authority (the "Authority")

successfully issued $152,925,000 in bonds on behalf of The Community Hospital Group, Inc. (trading as JFK

Medical Center) through the Hospital Asset Transformation Program ("HATP").

The HATP was enacted so that a hospital terminating acute care services at a specific location for financial

reasons can access low-cost financing vehicles to borrow the funds needed to help: pay existing debt, close

services in an orderly fashion, and expand another facility to handle patients from the closed facility. Thisaccomplishes several policy goals, such as reducing overbedding as reported by the Commission on

Rationalizing New Jersey's Health Care Resources, providing some relief to hospitals that are financially-

strapped from the resulting stranded debt, and preserving as many services and jobs as possible in a nearby

facility.

Under the HATP, the Authority can issue State-backed bonds, secured by a contract with the State

Treasurer, on behalf of a hospital meeting certain criteria. These bonds can be used to: refund the

outstanding bonds of a hospital terminating acute care services at a location where they are no longer

useful; pay closure and transition costs of the closed hospital; and, pay costs of facility improvements to the

surviving hospital to help handle the inflow of services and patients. This program allows the hospital to

borrow funds and benefit from the good credit rating, resulting from the bonds' State contract backing,

which provides lower interest rates.

According to the contract, the Treasurer agrees to pay the principal and interest on the bonds when due,

subject to an annual appropriation by the Legislature. At the same time, the borrower (JFK Medical Center)


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enters into a loan agreement with the Authority to make payments equal to the principal and interest on the

bonds plus other related costs and fees. The NJHCFFA, under contract with the Treasurer, will pay those

funds directly back to the State.

Consistent with the HATP, the proceeds of the Series 2009 bonds were used to pay off outstanding debtrelated to Muhlenberg Regional Medical Center, which closed last year, and to renovate and expand nearby

JFK Medical Center to meet the increased demands of the service area population. More specifically, the

proceeds refunded bonds issued through the Authority on behalf of: JFK Medical Center in 2005; the

Community Hospital Group in 2003; Muhlenberg Regional Medical Center in 2000; Hartwyck at Oak Tree in

1998; and, JFK Health Systems in 1995 and 1993. Proceeds also funded an increase to the inpatient

capacity and an expansion of the emergency department (among other renovations and improvements) at

JFK Medical Center.

Based on the State's backing pursuant to the HATP contract, the bonds received an "A+" rating from Fitch,

"A1" from Moody's and "AA-" from S&P. The encouraging ratings helped to yield the low all-in true interest

cost of approximately 5.77%.

JFK Medical Center, a 399-bed teaching hospital, is a subsidiary of Solaris Health System ("Solaris") which

encompasses a wide array of organizations, services and facilities in central New Jersey. Solaris' other

affiliated organizations include: the JFK Muhlenberg Campus (a Satellite Emergency Department with

support services and health education); JFK Hartwycks Nursing, Convalescent and Rehabilitation Centers

(three locations providing a total of 600+ long-term care beds); The JFK Johnson Rehabilitation Institute (a

94-bed comprehensive rehabilitation facility); Whispering Knoll (a three-story assisted living facility); JFK

MediPlex Surgery Center (a free-standing facility for same-day surgery); and The Muhlenberg Harold B. and

Dorothy A. Snyder Schools (an education program for Nursing, Medical Imaging and Therapeutic Sciences).

The Authority was created in 1972 by an act of the Legislature to provide not-for-profit health care providers

with access to low-cost capital. It is the primary issuer of municipal bonds for New Jersey's health care

organizations. During its 35+ year history, the Authority has issued over $16 billion in bonds on behalf of

over 145 health care organizations throughout the state.

###

THROUGH THE HOSPITAL ASSET TRANSFORMATION PROGRAM

(Trenton) On June 18, 2009, the New Jersey Health Care Facilities Financing Authority (the "Authority")

successfully issued $152,925,000 in bonds on behalf of The Community Hospital Group, Inc. (trading as JFK

Medical Center) through the Hospital Asset Transformation Program ("HATP").


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The HATP was enacted so that a hospital terminating acute care services at a specific location for financial

reasons can access low-cost financing vehicles to borrow the funds needed to help: pay existing debt, close

services in an orderly fashion, and expand another facility to handle patients from the closed facility. This

accomplishes several policy goals, such as reducing overbedding as reported by the Commission on

Rationalizing New Jersey's Health Care Resources, providing some relief to hospitals that are financially-

strapped from the resulting stranded debt, and preserving as many services and jobs as possible in a nearby

facility.

Under the HATP, the Authority can issue State-backed bonds, secured by a contract with the State

Treasurer, on behalf of a hospital meeting certain criteria. These bonds can be used to: refund the

outstanding bonds of a hospital terminating acute care services at a location where they are no longer

useful; pay closure and transition costs of the closed hospital; and, pay costs of facility improvements to the

surviving hospital to help handle the inflow of services and patients. This program allows the hospital to

borrow funds and benefit from the good credit rating, resulting from the bonds' State contract backing,

which provides lower interest rates.

According to the contract, the Treasurer agrees to pay the principal and interest on the bonds when due,

subject to an annual appropriation by the Legislature. At the same time, the borrower (JFK Medical Center)

enters into a loan agreement with the Authority to make payments equal to the principal and interest on the

bonds plus other related costs and fees. The NJHCFFA, under contract with the Treasurer, will pay those

funds directly back to the State.

Consistent with the HATP, the proceeds of the Series 2009 bonds were used to pay off outstanding debt

related to Muhlenberg Regional Medical Center, which closed last year, and to renovate and expand nearby

JFK Medical Center to meet the increased demands of the service area population. More specifically, the

proceeds refunded bonds issued through the Authority on behalf of: JFK Medical Center in 2005; the

Community Hospital Group in 2003; Muhlenberg Regional Medical Center in 2000; Hartwyck at Oak Tree in

1998; and, JFK Health Systems in 1995 and 1993. Proceeds also funded an increase to the inpatient

capacity and an expansion of the emergency department (among other renovations and improvements) at

JFK Medical Center.

Based on the State's backing pursuant to the HATP contract, the bonds received an "A+" rating from Fitch,

"A1" from Moody's and "AA-" from S&P. The encouraging ratings helped to yield the low all-in true interest

cost of approximately 5.77%.

JFK Medical Center, a 399-bed teaching hospital, is a subsidiary of Solaris Health System ("Solaris") which

encompasses a wide array of organizations, services and facilities in central New Jersey. Solaris' other

affiliated organizations include: the JFK Muhlenberg Campus (a Satellite Emergency Department with

support services and health education); JFK Hartwycks Nursing, Convalescent and Rehabilitation Centers


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(three locations providing a total of 600+ long-term care beds); The JFK Johnson Rehabilitation Institute (a

94-bed comprehensive rehabilitation facility); Whispering Knoll (a three-story assisted living facility); JFK

MediPlex Surgery Center (a free-standing facility for same-day surgery); and The Muhlenberg Harold B. and

Dorothy A. Snyder Schools (an education program for Nursing, Medical Imaging and Therapeutic Sciences).

The Authority was created in 1972 by an act of the Legislature to provide not-for-profit health care providers

with access to low-cost capital. It is the primary issuer of municipal bonds for New Jersey's health care

organizations. During its 35+ year history, the Authority has issued over $16 billion in bonds on behalf of

over 145 health care organizations throughout the state.

###

$150+ million issued on behalf of jfk medical

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