Press Release

For More Information Contact the NJHCFFA
Communications Department:
609-292-8585 X142
For Immediate Release:

CONTACT: Stephanie Zschunke
PHONE: 609-292-8585
Date: January 28, 2010


(Trenton) On January 27th, the New Jersey Health Care Facilities Financing Authority (the “Authority”) successfully issued its second series of bank qualified bonds on behalf of Shore Memorial Hospital.

Bank qualified bonds are tax-exempt bonds for which a financial institution, in this case TD Bank, can deduct the carrying costs associated with the bonds, (i.e. the interest expense incurred to purchase or carry an inventory of securities), which in turn, helped the hospital receive a more favorable interest rate from the bank. In order to qualify for bank qualification, the borrower must not exceed an issuance of $30 million per year. Shore Memorial required an issuance of $45 million to complete the project. In order to stay within the bank qualification parameters, Shore Memorial issued $30 million in September of 2009. This $15 million issue will provide the remaining funds needed for the project while still fitting the bank qualification criteria.

The proceeds of the bonds will be used to finance and reimburse costs associated with the construction and equipping of a new surgical pavilion. Structured similarly to the 2009 issue, the bonds were issued as a variable rate transaction with a final maturity date of July 1, 2039. The rate of both series of bonds is based on an index rate that equals 69% of the sum of the 30 Day LIBOR plus a spread of 350 basis points, determined initially on the closing date and recalculated monthly. The initial rate for this issue was 2.57%.

Shore Memorial Hospital, located in Somers Point, New Jersey, is a not-for-profit, 296 licensed-bed facility with 1,600 employees and more than 350 physicians. It is accredited by the Joint Commission, which has also certified the hospital with a Gold Seal of Approval™ as a Primary Stroke Center. Shore has also received a Gold Seal of Approval™ for healthcare quality by the Joint Commission for Lumbar and Cervical Spine Surgery programs. In addition to centers of excellence in Cancer, Cardiovascular, Neurological, Orthopedic, Emergency and Maternity and Pediatric health care, it has a long-standing affiliation with both the University of Pennsylvania Health System and The Children’s Hospital of Philadelphia.

Created in 1972 by an act of the Legislature to provide not-for-profit health care providers with access to low-cost capital, the Authority is the primary issuer of municipal bonds for New Jersey's health care organizations. Since inception, the Authority has issued over $16 billion in bonds on behalf of over 150 health care organizations throughout the state.