The Massachusetts Development Finance Agency sold $437 million in bonds to finance improvements at a pediatric hospital in Boston.
The agency issued the bonds in three series. The Series T bonds, consisting of $436.6 million, mature between 2034 and 2054, yielding between 2.71% and 4.16%. The Series U bonds, consisting of $216 million, mature on March 1, 2048, and yield 2.95%. The Series V bonds, consisting of $252.5 million, have a final maturity in 2049 and a coupon rate of 5.9%.
The Series T bonds received a rating of Aa2 from Moody’s Investors Service and AA from S&P Global Ratings. The Series U bonds received a rating of AAA/A-1+ from S&P and Aa1/VMIG 1 from Moody’s, which assigned a negative outlook.
The agency will loan the bond proceeds to Boston Children’s Hospital, a Harvard University-affiliated teaching hospital.
The rating “reflects Children’s preeminent reputation as a top children’s hospital in the US, with recognition as a leading pediatric research institution, that will support maintenance of its tremendous national and international demand for services,” Moody’s analysts wrote. They added that the negative outlook reflects the risks associated with achieving a higher operating cash flow “in order to support significant capital spending and elevated levels of debt.”
The Series T issuance will fund the hospital’s capital plan, which calls for $6 billion in spending over the next 10 years. The Series T and Series U proceeds will refund bonds the agency sold in support of Boston Children’s Hospital in 2013 and 2014.
The bonds are special obligations of the agency, payable by Boston Children’s Hospital Revenue.
TD Securities (USA) LLC served as underwriter on the issuance. Kaufman, Hall & Associates, LLC acted as financial advisor.