The Connecticut Health and Educational Facilities Authority issued $651.9 million in bonds to finance improvements at a network of hospitals affiliated with Yale University.
The authority sold the bonds in three series. The Series 2024A bonds, consisting of $156.7 million, mature between 2025 and 2048, yielding between 3.31% and 4.1%. The Series 2024B bonds, consisting of $158.2 million, mature in 2049 (with a mandatory tender in 2029) and are priced to yield 7.062%. The Series 2024C bonds, consisting of $337 million, mature in 2060 and pay interest at a weekly rate.
The authority will lend the bond proceeds to the Yale New Haven Health System (YNHHS). The securities received a rating of A+/F1+ from Fitch Ratings and AA-/A-1+ from S&P Global Ratings.
Fitch analysts wrote that system “is implementing steps that are expected to improve operating results over time supported by recent volume growth as well as institutional characteristics, such as its local and regional market presence and brand recognition for tertiary and quaternary care, and a now closer alignment with the Yale School of Medicine.”
YNHHS will use the proceeds from the issuance to buy a new, nine-story clinical research building for its flagship Yale New Haven Hospital. The bonds will also fund the construction of a neurosciences center at the system’s Saint Rafael campus, which is a couple blocks away from Yale New Haven Hospital. YNHHS acquired the former Hospital of Saint Rafael in 2012.
The bonds are special obligations of the Health and Educational Facilities Authority, secured by a pledge of gross revenues of YNHHS’s obligated group. The system recorded $6.6 billion in operating revenue last fiscal year.
Barclays Capital Inc and J.P. Morgan Securities LLC served as underwriters on the issuance. Acacia Financial Group, Inc acted as financial advisor.