Completed Transactions
Unity Hospital of Rochester
$205,250,000 FHA Insured Tax-exempt Mortgage Revenue Bonds November 5, 2010
The Unity Hospital of Rochester is the acute care provider of Unity Health System, a network of senior care services located in western Monroe County, New York. The proposed project is an addition and total renovation of this 1974 hospital. Upon project completion, Unity will be state of the art. The complex nature of the construction of additions to and total renovation of an operating hospital while it remains in full service added to the necessity of close cooperation between the construction project team, the financing team, and required significant coordination with the New York State Department of Health. AMS worked closely with one of the leading underwriters of municipal bonds to achieve a timely and cost effective financing for Unity. A pre-existing Section 232 financing for a sister company presented
some special opportunities to work closely with the two divisions of the HUD Office of Healthcare Programs: hospitals and nursing homes.
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Mennonite General Hospital
$129,966,100 FHA / GNMA Insured Mortgage Loan January, 20, 2010
Mennonite General Hospital in Cayey, Puerto Rico retained AMS to refinance its non-investment grade tax-exempt bond debt, approximately $48,000,000, and expand one of its three hospitals for a total FHA Insured Mortgage Financing of $129,966,100. Mennonite has served the people of the central highlands of Puerto Rico for 65 years as the near sole provider of medical care. Begun as an outpatient clinic, Mennonite has grown to three hospitals, a major outpatient treatment center, three HUD housing facilities for the aged, including a section 812 facility for the disabled elderly. Operating their newest hospital, completed in 1998, at over 100% occupancy required Mennonite to add a major expansion project. Concerned with the rising cost of energy, the proposed Project also included conversion of air-cooled chillers with water cooled equipment. Mennonite also operates a health plan and manages three 24-hour emergency rooms for the Government of Puerto Rico. Mennonite funded its FHA Insured Hospital Mortgage loan with GNMA Securities.
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Capital Health
$755,874,500 FHA / GNMA Insured Mortgage Loan April 7, 2009
AMS staff served as mortgage banker to Capital Health System (CHS). CHS is a two-hospital system with both of its primary acute care hospitals located in urban neighborhoods. CHS had limited ability to expand or replace either of its two hospital campuses. CHS identified three potential greenfield sites suitable to build a replacement hospital for its Mercer campus. The proposed project with an estimated cost of approximately $650 million would include a new 230-bed acute hospital, medical office building and central energy plant. This coupled with the approximately $200 million of refinancing resulted a total project requirement of approximately $880 million. Once CHS obtained its mortgage insurance commitment on December 2008 for $755,874,500, a funding source became the next key decision point: taxable or tax-exempt. Reinvestment rates were at an all time low, resulting in over $50 million of expected negative arbitrage. The capital markets had collapsed. It was decided by the project team that the best use of the mortgage insurance commitment would be through a taxable GNMA funding. The GNMA option eliminated the negative arbitrage on the construction portion of the loan, did not require a Debt Service Reserve Fund, bond ratings, an Official Statement, or an issuing authority.
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Medical University Hospital Authority
$422,060,000 FHA Insured Mortgage Hospital Facilities and Revenue Refunding Bonds December, 2004
AMS staff was mandated to assist by Medical University Hospital Authority (MUHA) of South Carolina in Phase I of its replacement project. MUHA is an instrumentality of the State of South Carolina, created to operate the teaching hospitals of the Medical University of South Carolina (MUSC), the oldest medical school in the South, founded in 1824.
MUHA was founded to move the hospitals of MUSC out of the governmental sector and into the not-for- profit arena. South Carolina has been growing recently through an influx of retirees from the Northeast, who expect and demand access to high quality academic medical centers. The MUSC hospitals had operated at a loss for a considerable time, with limited access to capital and tired facilities. MUHA changed the operating result and now need to change the facilities.
AMS developed a plan to utilize FHA-242 Mortgage Insurance to fund Phase I of an ambitious $900 million total replacement and expansion plan for MUHA.In December 2004, MUHA funded its capital needs through a taxable and tax-exempt bond issue, $61,000,000 Central Energy Plant, and $50,000,000 tax-exempt equipment lease.
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St. Francis Hospital, Inc.
$210,000,000 FHA-Insured Mortgage November 30, 2011
St. Francis Hospital, Inc. had five major construction goals: (i) to expand its very successful cardiovascular practice facilities, (ii) to improve its operating rooms’ efficiency with additional prep and recovery spaces, (iii) to increase its emergency room capacities and (iv) to construct a new Medical Office Building, and (v) to improve efficiency by converting semi-private rooms to private rooms.
The Hospital, located in Columbus Georgia, selected architects to renovate its older areas – some of which dated back to 1949 -- and to design a new Clinical Services Tower and adjacent Medical Office Building. To meet the terms of its CON, the Hospital needed to begin the project within a limited construction window. The Project would also require refunding of some $50 million in tax-exempt bonds, which also encumbered assisted living and behavioral health facilities.
St. Francis and its underwriter called upon AMS to sort through and coordinate the real estate, environmental and regulatory demands. The Hospital had a variety of real properties, some of which were mortgaged to other lenders. AMS put together and executed a plan to obtain FHA insurance and get the transaction closed within the CON deadline. AMS broke new ground with FHA in permitting post-closing transfers of assets between various St. Francis entities and in obtaining mortgage releases (without payment of release prices) for non-core properties.
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