The Michigan Finance Authority sold $249.3 million in bonds to finance a utility plant that will provide water to a new hospital in Detroit.
The bonds mature between 2027 and 2057, yielding between 3.22% and 4.6%. They received a rating of A3 from Moody’s Investors Service.
The authority will loan the bond proceeds to Henry Ford Health, a nonprofit hospital network based in Detroit.
“The A3 rating reflects the high essentiality of the Project to the Henry Ford Health System’s Detroit South Campus coupled with its sound market position and high predictability of cashflows,” Moody’s analysts wrote.
The issuance proceeds will fund system improvements that “satisfy the chilled and hot water needs” of a planned Henry Ford Health hospital expansion in southern Detroit.
Henry Ford Health operates six hospitals in Michigan. Detroit’s Henry Ford Hospital is the largest, with 877 beds. The expansion will add one million square feet to the hospital, but the number of total beds will stay the same; the renovation will convert the hospital’s currently shared rooms to private ones, according to the Henry Ford Health website.
The bonds are limited obligations of the Michigan Finance Authority, payable by Henry Ford Health System revenue.
J.P. Morgan Securities LLC served as underwriter on the issuance, purchasing the bonds for $265 million. The price reflected a premium of $16 million.