Case Study

Pella Regional Health Center

PFM served as financial advisor to the Pella Regional Health Center ("PRHC" or the "Health Center") in conjunction with its first public bond offering issued in 2006. The Health Center's Series 2006 Bond financed a major expansion and renovation project with an estimated cost of approximately $39 million. PRHC, located in Pella, Iowa, owns and operates a 25-bed critical access hospital (as designated by Medicare), five medical clinics and a long-term care facility. As a first time borrower, PFM spent a great deal of time with the Board and management team educating them on the process of accessing funds through the public debt market.

The financing was large relative to the size of the institution but as a critical access hospital it was imperative to understand the nuances of the credit in order to achieve an investment grade rating and bond insurance. We advised the Health Center on all aspects of the financing including procuring an investment banker, debt capacity, financing structure, the credit enhancement and rating agency process, and the pricing of the bonds. In addition, PFM Asset Management advised the Health Center on a forward hedging strategy through a fixed payer swap.