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MANNING, IOWA (March 25, 2013) – Manning Regional Healthcare Center in Manning, Iowa, recently obtained $21 million in funding for a $24.8 million replacement hospital, according to Quintin Harris, vice president of Lancaster Pollard, a national investment banking and mortgage banking firm headquartered in Columbus, Ohio, who is with the firm's office in Lawrence, Kan.
"As a critical access hospital, Manning Regional Healthcare Center plays an essential role in providing needed medical care to rural Carroll and Crawford counties in western Iowa," said Quintin Harris. "We're pleased we could help guide the hospital's leadership in the financing of a new state-of-the-art hospital facility."
Manning Regional Healthcare Center is comprised of three entities: Manning General Hospital, a 17-bed critical access hospital; Manning Family Recovery Center, 13-bed chemical dependency treatment center; and Manning Plaza, a 56-bed skilled nursing facility. The hospital was originally constructed in 1926 with subsequent additions over the years. The need for a replacement hospital was recognized by Manning Regional Healthcare Center's leadership as imperative to provide modern health care delivery, to keep pace with the shift to outpatient services and to attract new physicians for expanded and improved quality of services.
Lancaster Pollard leveraged its experience with the U.S. Department of Agriculture (USDA) Communities Facilities program to assist in obtaining $21 million of direct funding for the replacement facility's permanent financing. Because USDA direct loans cannot be used to fund construction, Lancaster Pollard took the lead in structuring the short-term financing and soliciting regional banks for the lowest cost of capital.
The $21 million in construction funding was structured as two $10 million tax-exempt, bank-qualified, hospital revenue bonds and a $1 million taxable note. All three bonds were priced at an effective annual rate of just over 1%. Manning Regional Healthcare Center committed $3.8 million in equity to finance the $24.8 million project. Upon completion, the USDA direct funding will pay off the construction funding.
"The challenge was finding a source for construction funding at the lowest cost possible with the most flexible terms," Harris said. "The exceptionally low interest rate is enabling Manning to build a 67,000-square foot replacement facility, one-half mile from the existing facility."
The new hospital will be a one-story facility with 24-hour emergency services, inpatient and outpatient services as well as housing the Manning Family Recovery Center. Construction has begun and the project is expected to be completed by 2014.
For more information about the Manning Regional Healthcare Center financing, visit www.lancasterpollard.com/hospital-financing.aspx.
About Lancaster Pollard
Lancaster Pollard helps health care, senior living and housing organizations expand and improve their services by providing financing solutions. The firm offers a full range of investment banking, mortgage banking and investment advisory services and has one of the largest groups of financial professionals dedicated to health care in the country. As a leading underwriter of bonds and mortgages, Lancaster Pollard has earned a reputation for delivering sound financial advice and the most cost-effective financing options available in the market.