Capital One provided a $73.4 million credit facility to Doctors Community Hospital, an independent, not-for-profit hospital serving Maryland’s Prince George’s County and the greater Washington, D.C. area.
The debt was structured as a $31.9 million tax-exempt bond issued by the Maryland Health and Higher Educational Facilities Authority and a $41.5 million taxable loan, which is expected to convert to a tax-exempt bond in 2017. Proceeds were used to repay existing tax-exempt financing, reducing the hospital’s debt service significantly. The new bonds have similar maturity dates as the ones they replaced.
The financing was arranged through Capital One Municipal Funding, which provides tax-exempt financing primarily for not-for-profit organizations such as schools, foundations, trade associations and cultural or community institutions seeking funds for capital improvement projects.
“This was a complicated transaction requiring a number of adjustments before closing, but throughout it all, our overriding priority was finding terms that served the hospital’s goals,” said Kathleen Malloy, SVP and Washington-area manager of Capital One’s Not-For-Profit Banking Group. “Our team is committed to working with strong community-based organizations whose mission is to serve the residents of our region.”
Doctors Community Hospital was advised by Chuck Stafford and Todd Smart of Ziegler Investment Bank and John Chaney of Ponder & Co.
Founded in 1975, Doctors Community Hospital is a 212-available bed facility that provides medical and surgical services in Lanham, MD.
Ziegler is an investment bank to community and regional healthcare providers.