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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowHistorically low bond rates helped executives at the parent corporation of Wishard Health Services raise the funds to build a new hospital for even less money than they even dreamed.
In late February, Health & Hospital Corp. of Marion County completed sales of $661 million in bonds, which will help finance a new $754 million hospital. It is scheduled to open in December 2013.
With the help of the Indianapolis Bond Bank, law firms and financial advisers, Wishard officials sold the bonds at a combined interest rate of 3.9 percent. Hospital officials thought the best they would get would be 4.5 percent.
The difference will add up to $80 million over the 30-year life of the bonds, said Dan Sellers, chief financial officer of Health & Hospital Corp.
The hospital had assumed it would pay about $50 million a year in debt-service payments. But now, it will have to pay just $36.5 million.
Wishard was helped by the Build America program, part of President Obama’s stimulus bill, which subsidized the interest rate on many of the Wishard bonds.
“It’s a very significant savings to the taxpayers and to us as an organization,” said Matt Gutwein, CEO of the Health & Hospital Corp. “What it means is we’ll be able to provide more care to the community.”
The worst-case scenario, as predicted by Health & Hospital Corp., would have sold bonds at a rate of 6.16 percent. Compared with that scenario, the hospital will save $356 million over the life of the bonds.
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