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Fort HealthCare Poised for Fiscal Health

Community Health
Monday, February 16, 2015

Hospital-Flag-2014-web2Fort HealthCare recently completed refinancing bonds it originally issued in 2004. The bonds became “callable” earlier this year and market conditions proved favorable to refinance them. Between Fort HealthCare’s continued strong operating performance and improved market conditions, Fort HealthCare was able to save over $10 million over the remaining 20 years of the bonds. The savings are achieved thru accessing lower interest rates and the ability to extinguish about $3.5 million of the bonds early. James Nelson, CFO for Fort HealthCare, explained that the refinancing concept is similar to refinancing the mortgage on one’s home. “Because we have strong credit rating and because interest rates have declined, we were able to reduce our annual payments and shorten the life of the “mortgage”, saving about $500,000 per year,” Nelson commented.

“The process took us about 4 months and involved a lot of help from our attorneys and consultants to put together a package for prospective bond buyers. We paused to have the bonds rated by Standard & Poor’s. They see and evaluate hundreds of hospitals of all shapes and sizes each year. Their process involves looking deep in our operations, cost, quality, medical staff composition, competition and general economic conditions of our service area. They issued a BBB rating with a Stable Outlook on the new bonds. It was a nice affirmation of the good work that we do here at Fort HealthCare,” Nelson continued.

Nelson related that the process is very regulated and time consuming. He shared that bonds were offered to large institutional buyers in mid-December and were attractive enough to have about 3 buyers vying for every bond that was available. Fort HealthCare is very pleased with the outcome and works diligently to contain costs.

Fort HealthCare continues to be an independently operated, locally-controlled, not-for-profit integrated hospital and health system that attracts patients from throughout southeastern Wisconsin. Fort HealthCare’s 60-plus year tradition of continuous service to the community remains the focal point of its mission to “Improve the Health and Well-being of Our Community” and the vision to “Be the Healthiest Community in Wisconsin.” Mike Wallace, President/CEO, states “We’re committed to the health of our communities, and we’re always here to listen, understand, and respond to your health care concerns. With ongoing fiscal stability and the communities’ engagement, we can achieve our mission and vision.”