The $20 million in new bonds will be sold with an aggregate interest rate of 3.71 percent. Floyd Medical Center President Kurt Stuenkel stressed that none of the debt is associated with the April 1 takeover of management and operations at Polk Medical Center in Cedartown.
The new bonds have been earmarked for work on the fourth floor, renovations to the cath lab and related equipment, expansion and improvements to the Emergency Room, a variety of small renovation projects throughout the hospital, and expenditures related to the enhancement of electronic medical records purchases.
The refinancing of older debt will save the hospital approximately $4 million during the term of the new issue.
“I’m sure there’s something we can do with that $4 million,” said Hospital Authority Chairman Jerry Norman. “I think this worked out well for both sides.”
After the bond sale closes the Hospital Authority will send Floyd County a check for nearly $900,000, an amount that is roughly equivalent to 80 percent of the savings of not having to purchase private bond insurance.
Monk said closing on the bond sale is expected to take place Tuesday.
Prior to the action by the Hospital Authority, the Floyd County approved the bond deal. As of July 1, Floyd Medical Center and the county will have more than $120 million in outstanding bond debt.
Moody’s Investors Service has rated the bonds Aa2. The bonding agency said that the proven history of Floyd Medical Center’s ability to support debt service and Floyd County’s health financial reserve are positive factors affecting the bond rating.
A history of structurally imbalanced county operations, below average demographics and the recent failure to renew a 1 cent special purpose, local option sales tax were challenges that kept the bond rating from being even better.