Attorney: $942 million Ohio bond issue will include up to about $38 million for Lorain County Mercy facilities; bonds not county debt

An outside attorney representing the hospital system told the Lorain County Board of Commissioners on March 20 that a proposed Ohio bond issuance for Mercy Health is sized at a not-to-exceed $942 million statewide and that roughly $38 million of that total is attributable to facilities in Lorain County.

Reginald Staples, introduced as an attorney and partner with the law firm named in his presentation, said the issuance would be made by Allen County on behalf of the health system. He emphasized that the bonds are not a debt of Lorain County and that the county would not be responsible for payment of debt service. “The bonds are not a debt of Lorain County, nor is Lorain County on the hook, to pay the bond,” Staples said during the presentation.

Why it matters: the action the board took was to authorize the county to approve the use of proceeds in Lorain County as part of a larger issuance; county approval is a step in the federal-tax compliance process for tax-exempt bond financing. The attorney said the final total may be smaller once the plan of finance is finalized.

Staples said the bonds will be issued by Allen County to provide Mercy Health access to financing that requires a political subdivision as issuer. He described two principal uses for proceeds: refunding existing Mercy Health debt and reimbursing capital expenditures already made at hospitals and facilities, including those in Lorain County. He said that a public hearing for the issuance had been held previously and that the resolution before the commissioners on March 20 was step two in the local approvals process.

Ending: The commissioners voted to approve the resolution allowing the use of proceeds in Lorain County; staff recorded the vote as affirmative and thanked the presenter. The attorney departed after the meeting.