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RESOLUTION R-1213-115: A RESOLUTION APPROVING AND AUTHORIZING THE NORMAN REGIONAL HOSPITAL AUTHORITY TO REFUND A PORTION OF THE SERIES 2002 HOSPITAL REVENUE BONDS (THE “SERIES 2002 BONDS”) TO BE ACCOMPLISHED BY THE ISSUANCE OF BONDS, NOTES OR OTHER EVIDENCES OF INDEBTEDNESS, ON A TAX-EXEMPT OR TAXABLE BASIS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED TWENTY-FIVE MILLION DOLLARS ($25,000,000) TO PROVIDE FUNDS NECESSARY TO REDEEM A PORTION OF THE SERIES 2002 BONDS AND PAY THE COSTS OF ISSUANCE; APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS IN CONNECTION THEREWITH; AND WAIVING COMPETITIVE BIDDING, PURSUANT TO 60 O.S. SECTION 176(F).
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BACKGROUND: Norman Regional Health Systems (NRHS) is a public trust operated under the authority of the Oklahoma Public Trust statutes (60 O.S. §176 et seq.). The City of Norman is the beneficiary of the public trust. As a beneficiary of the public trust, the Norman City Council is required to consider and approve of debt issuances of the public trust. NRHS has moved forward to refinance and refund a prior debt issuance. The NRHS Board approved the refinancing and refunding plan on March 25, 2013. This item is being brought forward seeking City Council concurrence with the action of the NRHS Board.
DISCUSSION: Included with the Agenda packet is a memorandum from Grant Ostlund of Ponder and Co. (financial advisors) to Ken Hopkins, Chief Financial Officer of Norman Regional Health Systems, that details the transaction and the attendant savings to the NRHS that will come from this refunding and refinancing. To summarize the main points, the proposal is to refund $27.385 million of Series 2002 Bonds issued on March 22, 2002 by using proceeds from a new $25 million debt issuance at a lower interest rate and a shorter term and from NRHS funds to pay off an $2.385 million of debt issued in 2002. The original issue was $55 million with rates ranging from 5% to 5.5% (average rate of 5.46%). The or...
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