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Bond counsel previews $20 million hospital bond; county told of 4.9% estimated interest
Summary
At a public hearing, bond counsel reviewed a proposed $20 million Taos County Hospital improvement bond, estimated preliminary net interest cost of about 4.9%, and said the transaction is expected to close Feb. 25 with a possibility of early redemption within about six years under conservative projections.
Bond counsel told the Taos County Commission that the hospital improvement financing is moving forward and offered a market preview ahead of final pricing.
Chris Muirhead, representing bond counsel, explained that the New Mexico Finance Authority will issue bonds and lend proceeds to the county; based on preliminary market assumptions the true interest cost to the county was about 4.9% on a 10-year structure to produce approximately $20,000,000 for hospital improvements. Muirhead said the authority expects to price the bonds the following week and that final terms will be confirmed by the sale certificate executed on closing; "it would ultimately close February 25," he said.
He described coverage metrics and a conservative projection of roughly $1.2 million annually above debt service, which could enable earlier redemption (he described a scenario where a 10-year structure could be paid off in roughly six years if revenues hold). The hearing provided the public an opportunity to comment on the project as required by federal tax rules for tax-exempt financing where the hospital is a 501(c)(3).
