The Industrial Development Authority of Fairfax County, Virginia, issued $368.2 million in bonds to finance improvements to hospitals in the area.
The bonds mature between 2032 and 2054, yielding between 3.12% and 4.31%. They received a rating of Aa2 from Moody’s Investors Service and AA+ from S&P Global Ratings.
The authority will loan the bond proceeds to the Inova Health Systems Foundation, a nonprofit hospital network based in Falls Church, Virginia, a suburb of Washington, DC.
“Inova’s Aa2 rating is anchored by its role as one of the largest health systems in Virginia with a leading market position in a rapidly growing region with unusually high commercial business,” Moody’s analysts wrote.
Inova operates five acute-care hospitals in northern Virginia and serves more than 1 million people annually. It will use the issuance proceeds to renovate its facilities and build new ones.
Inova’s master plan calls for two new hospital facilities to replace an aging hospital in Alexandria. It also calls for a new ambulatory care site in the rapidly developing Potomac Yard area, which won a stop on the Washington metro last year.
The bonds are limited obligations of the Industrial Development Authority and unsecured general obligations of Inova, backed by its revenue.
J.P. Morgan Securities LLC served as lead underwriter on the issuance, purchasing the bonds for $400 million. The price reflected a premium of almost $32 million. Kaufman, Hall & Associates, LLC acted as financial advisor.