Hallmark Health System Uses $70 Million MassDevelopment Financing Package to Refund Previous Debt, Fund Capital Improvements
April 8, 2013
MassDevelopment has issued a $50 million tax-exempt bond and $20 million tax-exempt lease on behalf of Hallmark Health System, Inc., a nonprofit health care system that includes Lawrence Memorial Hospital of Medford, Melrose-Wakefield Hospital in Melrose, Hallmark Health Medical Center in Reading, and a Hematology and Oncology Center in Stoneham. Hallmark Health System will use lease proceeds to buy and install medical and surgical equipment; patient-monitoring systems; computer equipment; and furnishings and fixtures. The organization will use bond proceeds to refund previous debt. TD Bank, N.A. purchased the bond. Bank of America Public Capital Corporation purchased the lease.
“MassDevelopment’s tax-exempt bonds and leases offer healthcare providers a flexible way to acquire the latest in life-saving equipment,” said MassDevelopment President and CEO Marty Jones. “This financing package will help Hallmark Health System build upon its quality care and save precious dollars, which can then be devoted to the hospital’s patients.”
Hallmark Health System’s two acute care hospitals house 268 beds and provide a full range of inpatient and outpatient services, ranging from behavioral health to wound care and hyperbaric medicine. Lawrence Memorial Hospital of Medford is home to a nationally recognized Center for Weight Management and Weight Loss Surgery and the Joslin Diabetes Center Affiliate at the hospital. Melrose-Wakefield Hospital offers patients a cardiac and endovascular center and a center for orthopedics and sports medicine, along with maternity services and a special care nursery.
“This significant financing will facilitate Hallmark Health System’s continuing efforts to reduce the cost of healthcare and at the same time provide the communities it serves with the latest in medical technology,” said James A. Nania, Executive Vice President and Chief Financial officer at Hallmark Health System.
MassDevelopment’s tax-exempt leases act essentially as installment loans. An investor lends funds to the borrower to purchase equipment and complete any related renovations, and the borrower agrees to make periodic fixed-rate payments. Generally, the borrower leases the equipment for a length of time approximating the useful economic life of the equipment. At the end of the lease term, the borrower typically pays a nominal amount and assumes ownership of the equipment.
MassDevelopment, the state’s finance and development agency, works with businesses, nonprofits, financial institutions, and communities to stimulate economic growth across the Commonwealth. During FY2012, MassDevelopment financed or managed 280 projects generating investment of more than $2.3 billion in the Massachusetts economy. These projects are projected to create more than 12,000 jobs and build or rehabilitate 900 residential units.