The California Public Finance Authority sold $250 million in federally taxable bonds to finance a loan to a nonprofit hospital system.
The authority issued the bonds in two series, each consisting of $125 million. Both sets of bonds mature in 2064 and pay interest at a rate determined weekly. The securities received a long-term rating of A+ from Fitch Ratings and AA- from S&P Global Ratings. They received a short-term rating of F1 from Fitch and A-1 from S&P.
The authority will loan the bond proceeds to Adventist Health System/West, a nonprofit health-care system based in northern California.
The rating “addresses our expectation of full and timely interest and principal payments,” S&P analyst Chloe Pickett said in a press release.
Adventist Health is expected to use the issuance proceeds to refinance outstanding indebtedness, according to the official statement accompanying the sale of the bonds.
Adventist Health, which is affiliated with the Seventh-day Adventist Church, operates 28 hospitals, primarily in California. The bonds are limited obligations of the California Public Finance Authority, secured by loan repayments from Adventist Health.
Barclays Capital Inc served as underwriter on the Series 2024B bonds, and PNC Capital Markets LLC served as underwriter on the Series 2024C bonds. Each financial institution provided an irrevocable letter of credit supporting the bonds it underwrote.