$7,600,000
The Economic Development Corporation of the
Charter Township of Pittsfield (MI)
Revenue Bonds
Personalized Nursing Service, Inc.
February 1997

Arbor Hospice is an independent, freestanding hospice and home care organization that had been delivering services in patients' homes and in other health care facilities since 1984.  Planning for an inpatient residence facility of its own began in 1991.  Since then, Arbor Hospice secured one of the five CONs in Michigan for the development of an inpatient residence facility, and has been the only freestanding organization to have achieved that distinction.  First River Advisory was engaged in March 1996 to develop and implement and capital financing plan that would supplement fundraising efforts, which were just then getting underway.  This transaction is believed to represent the first-ever financing for a hospice facility in the public capital markets.  The success of this financing demonstrates that hospice organizations have greater access to the capital markets than their governing boards and executives would have imagined.

This financing plan, as presently conceptualized, features the issuance of two maturities of a single series of tax-exempt bonds.  The bonds were sold to one institutional investor.  The longer maturity, featuring standard ten-year "no-call" provisions, was designed to represent Arbor Hospice's permanent debt.  A shorter maturity may be prepaid after five-years, and was designed to coincide with the receipt of donations pledged during Arbor Hospice's capital campaign.

First River Advisory's specific services included:

•  refining and managing the project budget;
• reviewing and commenting on management's forecasting model;
• drafting a comprehensive (60 pages) Financing Plan and Presentation of Credit Information and circulating it to prospective underwriters and investors;
• conducting presentations to prospective investors;
• organizing the financing team and orchestrating its members' activities;
• coordinating the timely receipt of various regulatory approvals, as well as the completion of design and pre-construction activities;
• revising and refining the Financing Plan;
• negotiating terms, conditions and covenants with bond investors, and ensuring that covenants could be achieved;
• soliciting a replacement working capital line of credit and coordinating its provisions with those of the bonds;
• preparing materials for the bond issuer's review and approval; and
• maintaining distribution lists and timetables and performing other project management functions.

First River Advisory was also engaged to perform several functions during the facility's development period, specifically:

• continued management of the project budget;
• assembly of the monthly requisition package;
• development of systems to streamline the reporting requirements contained in the financing documents;
• assembly of cost certifications and other information required in connection with the Medicaid rate-setting process;
• assistance with many aspects of readying the new facility for occupancy; and
• assurance of compliance with the terms, conditions and covenants contained in the financing documents.

In addition, the client has continually relied on Mr. Aronson's advice on general financial management issues and business development opportunities.

Reference: 
Mary Lindquist, Founder and Former President
  (734) 663-4851