The Sonoma Valley Health Care District board at a special meeting on July 27 approved final resolutions to refinance one of its two general obligation bonds at a lower interest rate, resulting in a $2.1 million savings for District taxpayers. The board had approved exploring refinancing the bond at its June 2021 monthly meeting.
“We’re delighted with the very quick and highly productive outcome of the placement effort,” said Bill Boerum, board member and Finance Committee chair. “The refinancing represents a projected savings of $2,154,000 for District taxpayers over the remaining 10 years of the bond. This exceeded our expectations because we were able to secure a lower interest rate than we anticipated.”
Boerum reported the final net proceeds of the refinancing (after costs of issuance) are $15,825,000. He noted that issuance costs, which are included in the proceeds of the bonds, were approximately $173,000, which is lower than expected. The refinancing required no equity or cash from the District or the County.
The refinancing was placed with Truist Bank, a large financial institution based in the southeast, through a private placement handled by Piper Sandler. The refinancing was managed by Gary Hicks of G.L. Hicks Financial LLC, who has worked with the District on past bond efforts.
The refinancing included one of the two general obligation bonds, which together originally totaled $35 million, that the District incurred in 2009 and 2010 to enable the District to finance hospital seismic mandates and the expansion of the west wing that included a new Emergency Department and Surgery Center. The 2009 bond was refinanced in 2014.