The North Shore-LIJ Health System next week will finalize the sale of the first installment of a $425 million capital financing program, highlighted by the construction of a $300 million, 10-story pavilion at LIJ Medical Center in Queens that will house the Katz Women's Hospital.
Robert Shapiro, senior vice president and chief financial officer at North Shore-LIJ, said the publicly offered $300 million fixed-rate bond issue through the Dormitory Authority of the State of New York attracted such strong demand from both retail and institutional investors that underwriters, led by Citigroup, were able to reduce interest rates to levels typically reserved for AA and A+ rated healthcare issuers.
North Shore-LIJ's bonds are rated A-, Baa1 and A- by Standard & Poor's, Moody's Investors Service and Fitch Ratings, respectively.
Underwriters attributed the strong demand to the health system's excellent clinical reputation and strong market position, as well as a shortage of bonds available in the municipal market.
"The lower interest rates will reduce North Shore-LIJ's debt service costs by tens of millions of dollars in the future," said Shapiro.
The final $125 million portion of the capital financing program will be sold in mid-September as variable rate bonds; they are expected to be supported by letters of credit from three separate banks.
North Shore-LIJ Health System is the nation's third largest, non-profit, secular healthcare system, serving Long Island, Queens and Staten Island – an area encompassing more than 5 million people.
The health system consists of 14 hospitals, 18 long-term care facilities, three trauma centers, five home health agencies, a hospice network and dozens of outpatient centers.