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Virginia Commonwealth University Issues $103 Million in Hospital Bonds

By Munichain News Desk

The Virginia Commonwealth University (VCU) Health System Authority sold $103.4 million in bonds to finance capital improvements at the largest hospital in Richmond.

The bonds mature between 2044 and 2054, yielding between 3.78% and 4.3%. They received a rating of Aa3 from Moody’s Investors Service and AA- from S&P Global Ratings.

“The Aa3 reflects Virginia Commonwealth University Health System’s status as one of the Commonwealth of Virginia’s leading academic medical centers and essential role as its largest safety net provider, supporting excellent patient demand at high acuity levels,” Moody’s analysts wrote.

The VCU Health System Authority’s revenue is anchored by the VCU Medical Center, the second-largest hospital in Virginia. Last year, the medical center opened up a 72-room children’s tower focused on pediatric medicine. 

The bond proceeds will reimburse capital expenditures related to the tower’s construction, which cost $420 million, according to the official statement accompanying the sale of the bonds.

The bonds are limited obligations of the authority, payable by health system revenue. The authority expects to issue an additional $100 million in Series 2024 bonds soon.

J.P. Morgan Securities LLC served as lead underwriter on the issuance, purchasing the bonds for $100.5 million. The price reflected a discount of $2.4 million. Kaufman, Hall and Associates, LLC acted as financial advisor.

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