Refinancing transactions save hospital millionsTweet
Armadale Capital (New York, N.Y.), an FHA multifamily mortgage lender specializing in health care finance, announced the closing of a new $47 million FHA-insured loan for Medical University Hospital Authority, an agency of the State of South Carolina, which owns and operates the MUSC medical center.
This was Armadale Capital’s second refinancing transaction with MUHA, the first being a $361 million refinancing and mortgage reduction transaction for substantially all of MUHA’s health care facilities which closed in December, 2012. The transactions together will save over $70 million over the next twenty years for MUHA. The FHA loans are insured under the U.S. Department of Housing and Urban Development (HUD) Section 242 Hospital Mortgage Insurance Program. Both loans were funded by the issuance of GNMA mortgage–backed securities.
Working closely with MUHA and the State of South Carolina’s Office of State Treasurer for the past two years, Armadale Capital helped develop a financing plan designed to achieve significant interest expense reductions on MUHA’s debt, as well as to terminate an outstanding swap and simplify MUHA’s accounting procedures. The first refinancing also reduced principal outstanding by $2.2 million. These benefits will enhance MUHA’s ability to continue to modernize its campus.
“MUHA established and refined a focused plan of finance and fortunately, with a highly favorable interest rate environment, we were able to achieve savings levels far in excess of industry refinancing standards and better position the medical center financially to compete and pursue its mission” said Stephen Pack, president of Armadale Capital.
“These transactions directly improve our ability to provide health care to our community now and over the long term, and we are very appreciative of our partnerships with HUD and the State Treasurer’s office in making these transactions real. This is a winner for MUHA, the State and federal government, and most importantly, the residents of South Carolina” said Stephen Hargett, Chief Financial Officer of MUHA.
“As our capital and refinancing needs arise, the HUD mortgage insurance program has consistently been instrumental in providing access to cost-effective capital for our institution” added Hargett.