Record-Size Bond Deal for Partners HealthCare
Key Facts
- Largest borrowing ever for our client, totaling over $1.3 billion
- The borrowing involved over a billion dollars in tax-exempt bonds issued simultaneously in MA and NH
- We achieved present value savings of over $125 million for the client
The Situation
Our long-term client, Partners HealthCare, was involved in one of their largest borrowings ever. Partners needed our team, in collaboration with theirs, to help swiftly close a bond deal ahead of the new tax bill’s effective date. This was the largest borrowing ever for Partners, with the deal proceeding to market in just seven weeks in order to close in 2017 ahead of the tax law changes. This deal is part of a select group of nationally visible healthcare deals planned for 2018 brought on an accelerated basis during the 2017 year-end rush. Partners’ refunding achieved present value savings of over $125 million.
The Approach
Our multi-faceted team creatively handled the tax issues, bond documents, disclosure materials, and multiple drafts in addition to hefty collaboration within our own team and Partners’ internal team. Greg Sandomirsky worked on drafts, the transaction picking, processing challenges and options with the working group and the clients’ internal team. Christie Martin handled everything tax related, working with on all of the unique, separate transactions buried in this “multi-purpose issue.” Matt Page took charge of preparing the voluminous bond documents, while the disclosure materials that focused on the client’s credit and significant risks revolving around the current state and federal marketplace were handled by Colleen Murphy.
The Outcome
We ultimately helped close taxable and tax-exempt bond totaling $1,351,314,000. Almost two thirds of the tax-exempt debt constitutes as am “advance refunding,” which allowability is eliminated under the new tax law, so it was pertinent that this deal was closed before the new tax law was effective. The net present value of the savings from all the refunding components was in excess of $125 million. All in all, this was a record-setting deal, by several measures, for an industry-leading client with a well-deserved international reputation for excellence.
