$25,040,000
Garden City (MI) Hospital Finance Authority
Hospital Revenue and Refunding Bonds
February 1998

In the latest assignment for this organization, First River Advisory served as Financial Advisor for this combination refunding and new-money bond issue.  The issue featured three notable characteristics:

1.  First River Advisory received many favorable comments from investment analysts about comprehensiveness of the Appendix A, which it prepared.  The Management's Discussion and Analysis broke new ground for a tax-exempt issue.  The first paragraph, containing language concerning "forward-looking" statements adapted from the corporate securities world, provided a springboard to present an extensive array of "non-traditional" information.

2.  This issue redefined "high-yield" as those bonds sold at yields in the upper 5%'s.  Demand for the issue was overwhelming.  The 2017 maturity was oversubscribed by seven times within an hour.  The final yield on the 2017 maturity, 5.85%, was only 64 basis points greater than the same maturity of a Michigan AMBAC-insured hospital issue having A1/A+/A+ underlying ratings that was sold the previous week.

3.  As one of the few remaining independent hospitals in an urban market, Garden City Hospital faced questions constantly concerning its access to capital.  The success of this issue confirms Shelley Aronson's long-standing contention that hospitals' access to capital is not as critical an issue as many industry participants and observers make it out to be.

Reference: 
Chris Palazzolo, former Chief Financial Officer
  (313) 745-6097
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