Lakeland, Florida, sold $137.5 million in bonds to refund bonds that it sold on behalf of a nearby hospital almost a decade ago.
The bonds mature between 2036 and 2045, yielding between 3.51% and 4.02%. They pay interest at 5%. The securities received a rating of Aa2 from Moody’s Investors Service.
Lakeland will loan the bond proceeds to Lakeland Regional Health Systems, a hospital based in the city that is one of the largest in Florida.
Moody’s analysts wrote that their rating reflects Lakeland Regional Health System’s 80% market share as well as its “primary service area and role as a Level II trauma provider, which will allow for conversion of robust demand into revenue growth, buoyed by above average population growth.”
The health system will use the money to refund bonds the city sold on its behalf in 2015.
Lakeland is a city of 120,000 people about 30 miles east of Tampa. The bonds are limited obligations of the city, payable by Lakeland Regional Health Systems revenue.
J.P. Morgan Securities LLC served as underwriter on the issuance, purchasing the bonds for $150.8 million. The price reflected a premium of $14 million and a discount of $687,000. Kaufman, Hall & Associates, LLC acted as financial advisor.