The Wisconsin Health and Educational Facilities Authority sold $374.9 million in bonds to finance upgrades at a nonprofit health system in the state.
The bonds mature between 2025 and 2054, yielding between 3.85% and 4.71%. They received a rating of BBB from Fitch Ratings and BBB from S&P Global Ratings.
The authority will loan the bond proceeds to Marshfield Clinic Health System, Inc.
In rating the bonds, Fitch upgraded Marshfield’s outlook to stable from negative. S&P downgraded Marshield from BBB+.
“The downgrade reflects our view of Marshfield’s continued challenged performance and a balance sheet with less flexibility due to declines in net assets as well as moderately higher debt levels due to issuances needed to maintain liquidity,” S&P analyst Suzie Desai said in a press release.
The issuance follows a significant contraction in the hospital system’s net assets. The consolidated system had $903.8 million in net assets at the end of last fiscal year, a 40% decline from the $1.51 billion it recorded at the end of FY 2021, according to the official statement accompanying the sale of the bonds.
Marshfield will use the bond proceeds to fund upgrades to its facilities. The health system operates 11 hospitals and 60 clinics in Wisconsin, making its one of the largest providers in the state.
The bonds are limited obligations of the Health and Educational Facilities Authority, secured by the revenue of Marshfield’s obligated group and a mortgage lien on some of its properties.
Barclays Capital Inc served as lead underwriter on the issuance. Kaufman, Hall & Associates, LLC acted as financial advisor.