The Northampton County General Purpose Authority issued $319.4 million in bonds to finance the expansion of a hospital in eastern Pennsylvania.
The authority sold the bonds in two subseries. The Series 2024A-1 bonds, consisting of $288.1 million, mature between 2025 and 2053, yielding between 2.88% and 4.1%. The Series 2024A-2 bonds, consisting of $31.4 million, mature in 2034 and yield 3%. The securities received an insured rating of A1 from Moody’s Investors Service and AA from S&P Global Ratings. Moody’s assigned the bonds an underlying rating of A3, and S&P assigned an underlying rating of A-.
The authority will loan the bond proceeds to St. Luke’s University Health Network, a 12-hospital system headquartered in Bethlehem, Pennsylvania.
The rating reflects the hospital’s “strong market position of a broad and widening service area and comprehensive breadth of tertiary and quaternary clinical services,” Moody’s analysts wrote.
St. Luke’s will use the bond proceeds to fund the expansion of one of its hospitals in Bethlehem. The system is building a new, 64-bed tower for cardiology services, which is expected to open in 2026 at a cost of $240 million. St. Luke’s said in the bond documents that the expansion was driven by “rising demand.”
Northampton County is about 75 miles north of Philadelphia. The bonds are limited obligations of the county’s General Purpose Authority, payable by St. Luke’s revenue. The hospital system recorded $3.2 billion in operating revenue last fiscal year.
BofA Securities, Inc served as underwriter on the issuance, purchasing the bonds for $347.8 million. The price reflected a premium of $30 million and a discount of $1.7 million. Echo Financial Products, LLC acted as financial advisor.