LARNED — A representative from the third prospective banking group made a final sales pitch to the Pawnee County Commissioners Monday.
Pat Hinojos, senior vice president public finance, Stifel, Nicolaus & Company Inc., Wichita, is optimistic about the potential for financing a proposed $18 million bond by the Pawnee Public Building Commission (PBC). Tom Giessel, Tim George and Dick King are members of a Pawnee Public Building Commission who will oversee the work on a proposed $18 million Pawnee Valley Community Hospital.
“It’s really an interesting project and the project should go well,” she said. “We’ve done a number of hospital bonds and it’s fun to be a part in keeping Kansas hospitals vibrant. Cities and counties that have invested in their medical services have done great.”
Hinojos said Stifel, Nicolaus has a strong history of health-care projects. The company underwrote a $24.7 million bond for Labette County Hospital, a $16 million bond for Coffeyville Regional Medical Center and a $10 million bond for the Women’s Christian Association of Kansas City, Mo.
“My advice is to find someone you feel comfortable with that makes sense to you,” she said. “You should work with the company that best gets you where you want to go.”
Hinojos said everything in Pawnee County’s hospital profile points towards a minimum interest rate and solid financial outlook.
“No debt for Pawnee County will make it attractive to buyers,” she said. “You will be happy with the results. There are a lot of pieces to the puzzle with a bond deal. We want to put together the best possible deal.”
Hinojos said bonds issued by the PBC, plus an anticipated A bond rating, would allow for 20-year bank-qualified, tax-exempt bonds at 4.34 percent interest in today’s market. The PBC receives $18 million to finance the project and UMB makes money by selling the bonds to investors, who also make money on their investment. A 25-year bond would come in for a 4.78 percent interest rate based on today’s market.
“The bond should be ‘A’ rated, which will get a better interest rate and will attract bond buyers,” she said.
Hinojos said a pre-rating by bond raters Standard & Poor’s or Moody’s, which costs between $12,000 and $15,000, assures the county of an guaranteed rating.
The commissioners must choose a banking company to underwrite and sell bonds for the financing of the new Pawnee Valley Community Hospital. Representative from Piper Jaffrey, Lenexa, and UMB, Kansas City, Mo., met with the commissioners last week.
The new hospital will be built at the site of the current PVCH facility. The current hospital location allows for continued use of the Pawnee Valley Medical Associates building next to the hospital.
Pawnee Valley owns a critical care access license, which is certified to receive cost-based reimbursement from Medicare. The reimbursement is intended to improve the financial performance though cost reimbursement plus 1 percent.