Solaris Health System, corporate parent of Plainfield's Muhlenberg operation, sold $152M in bonds last week, according to a report issued by the NJ Healthcare Facilities Funding Authority (see Authority here, Solaris sale here [PDF]).
The bonds, approved for issuance last fall, just as the financial markets went into meltdown, cover the restructuring of Solaris' debt (including that of Muhlenberg Regional Medical Center) and the addition of beds at JFK.
Finally going to market is an indication that conditions have improved -- word was that though authorization had been granted, Solaris never went out to the markets because interest rates and the amount Solaris would have to put up to float the bonds were both onerous.
The bonds are secured with a mortgage against 'the Medical Center and certain other properties' (read Muhlenberg?) and a gross revenue pledge.
Given the financial conditions of New Jersey hospitals, which is likely to get even worse with the budget passed last night by the Legislature, it is amazing that the ratings agencies are so kind to Solaris (Fitch: A+, Moody's: A1, S&P: AA-) with this bond offering.
But then you may recall it was these same ratings agencies who told us that the subprime mortgage securities that were so finely sliced and diced were all low-risk, too.
Looks like the markets are back at their old games.
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