Current Activity and Focus
HCDG has attracted $350 MM of initial commitments for qualified and approved NMTC-leveraging opportunities from JP Morgan/Chase; US Bank; Fifth Third Bank and Wells Fargo Bank.
We are currently investigating potential healthcare provider projects in the states of AZ, FL, OR, NE, TX, AL, LA, CO, PA, MO, OH, NY, NJ and HI.
The types of projects we are currently investigating include hospital expansion projects; combining the USDA loan guarantee program with NMTC leveraging; building new hospitals or medical clinics/facilities; using NMTCs to leverage IT leasing transactions for hospitals; equipment finance leveraging and bond refinance leveraging for hospitals committed to sustaining or creating valuable jobs and services in highly-distressed communities.
The possibility to use NMTCs to leverage the refinancing of existing debt (including bonds) only exists if the healthcare provider can clearly demonstrate/communicate significant financial stress/challenges and jobs and services which are highly valuable to the community and may be on the line unless this candidate can make significant progress towards cutting costs, becoming more efficient and/or finding additional sources of revenues. NMTCs can be used to “defend” existing jobs and services if their value to the community can be clearly communicated and the community would be clearly “worse off” if these jobs and services were allowed to disappear or be significantly cut back due to overwhelming budgetary problems.
HCDG recently coordinated presentations by JP Morgan Investment Bank and DA Davidson & Co proposing $90 MM financing options to the Board of a large regional hospital client in the Midwest. The capital stuctures include recommendations to target $50 MM of NMTCs to leverage facility expansion funding in order to reduce the hospital’s project cost by an estimated $8 MM.
HCDG spearheaded a team of top NMTC experts, which it identified and brought under contract as subcontractors for this hospital client. We also prepared the “financial package” describing how this hospital’s project was a “fit” for the NMTC program, attracted initial funding interest by four different commercial banks and four different bond underwriters and then collaborated with the most attractive funding options to generate the two comprehensive term sheets which were presented to our client’s Board as preferred options.
