The Industrial Development Authority of Arlington County, Virginia, sold $150 million in bonds to finance improvements to medical facilities run by VHC Health, formerly known as the Virginia Hospital Center.
The bonds mature on July 1, 2053, and yield a fixed rate of 3.76%. They pay interest at 5%. The securities received a rating of AA- from Fitch Ratings and A+ from S&P Global Ratings.
“The rating reflects our view of VHC Health’s favorable enterprise profile, highlighted by a stable, growing market share in a competitive market,” S&P analyst Chloe Pickett said in a press release.
The authority will lend the bond proceeds to VHC Health, which runs a 453-bed hospital in Arlington. It has made recent efforts to expand its reach amid a shortage of in-patient care in Northern Virginia. In January, the hospital system announced plans to build an $80 million, 112-bed mental health and rehab facility in Arlington. The project is expected to be completed by 2025.
Virginia lags behind other states in some mental health metrics. The nonprofit Mental Health America ranks Virginia 48th in the nation in youth mental health, with rankings based on prevalence of mental illnesses and access to care.
The bonds are limited obligations of the authority, payable by a pledge of gross revenue from the hospital system. The authority had intended to issue an additional series of bonds, but they did not sell.
J.P. Morgan Securities LLC served as lead underwriter on the issuance.