By Tia Lynn Ivey staff writer
The Morgan Memorial Hospital Authority voted last Thursday, during an executive session, to recruit Municipal Capital Markets Group, Inc. (investment bankers) and Alston and Bird (legal counsel) to assist with construction financing for the new hospital. “This is one more positive step towards making a new healthcare facility a reality for the citizens of Morgan County!” said Megan Morris, director of development for MMH.
According to Kyle Wilkinson, chief financial officer for MMH, Municipal Capital Markets and Alston and Bird will assist MMH in securing the “construction loan piece” of the hospital replacement project. “Much like building a new home, to build a new hospital, MMH will need an interim construction loan of $35 million,” said Wilkinson. “Once the new hospital is built, the construction loan will be paid off in full with the funds from the long-term loan. Then, the long-term loan/mortgage will be paid back over the next 25 years.” Wilkinson also noted that the total amount to be repaid will be $35 million, which includes both investment and legal fees that comprise .7 percent of the total cost of the new hospital project. “Municipal Capital Markets Group is the Investment Banking firm that will put the Construction Loan note financing together for MMH,” explained Wilkinson. “As with every other piece of the project, the MMH Finance Committee interviewed other investment bankers, but due to a combination of healthcare experience, and price of investment fees and estimated market interest rates for each type of note issue, MMH decided to engage Municipal Capital Market. Investment Fees for this transaction are capped at $175K or .50 percent of the Principal Amount.” According to Wilkinson, MMH chose Alston and Bird for legal representation because of the firm’s expertise in this type of note financing. The legal fees for Alston and Bird is capped at $70,000.