IDA gives nod to initial bond issuance for Saint Francis

The Industrial Development Authority of Cape Girardeau County on Thursday approved a resolution to issue $40 million in variable-rate, tax-exempt development bonds to Saint Francis Medical Center, the second of two issuances to fund hospital expansion and refinance debt.

The IDA held a public hearing regarding the bond resolution. No members of the public attended. Afterward, the board voted to ratify an inducement resolution made Feb. 22 to issue up to $90 million in Series 2013 B variable-rate bonds. Instead of the full amount, Saint Francis financial officials asked for $40,290,000.

Tony Balsano, Saint Francis vice president of finance, said the amount requested was determined by choosing the best refinancing options available for its existing debt. Wells Fargo Bank has agreed to direct placement of the bonds, he said, which means the bank will buy the bonds and they will not be placed on the bond market.

The bond resolution passed with four votes by Rex Meyr, Dan Driskell, John M. Thompson and Adam Kidd. Adriane Toole, Jon Rust and Dennis Marchi abstained.

The IDA will receive $40,000 in maintenance fees from the bond issuances and will oversee yearly audits of how funds are spent.

Steven C. Bjelich, Saint Francis president and chief executive officer, said $125 million in Series 2013 A fixed-rate bonds, approved by the IDA and Cape Girardeau County Commission last month and made available on the bond market last week, were sold in less than three hours.

A total of about $165 million has been issued through the IDA to Saint Francis since officials approached the development authority in February. The money is intended to refinance debt and help fund a $127 million expansion and renovation project, which includes a five-story medical tower and plans to upgrade existing facilities.

Also addressed was a $10,000 grant request made March 20 by Brian Gerau, executive director of the Jackson Area Chamber of Commerce. Thompson said the IDA would meet with Gerau to advise him on how funds can be used. Grants must be used strictly for economic development activities, not projects such as beautification, Thompson said.

Finally, the IDA discussed how to best invest assets held in its current reserves, which exceed $250,000. Members reviewed a plan to request strategies from area investment agents and brokerages, which will be shared next month.

The development authority was created as a not-for-profit corporation in 1979 after the Missouri Legislature adopted the Industrial Development Corporation Act in 1977. The organization issues bonds at a borrowing cost that often is below the cost of conventional financing to "creditworthy companies planning to construct, expand, equip and re-equip existing facilities," according to its website. The IDA considers applicant's financial responsibility, type of business activity, the marketing of the bonds and the benefits to the county.

The IDA will appear before the Cape Girardeau County Commission at 10 a.m. Monday to request approval to issue the bonds.

salderman@semissourian.com

388-3646

Pertinent address:

125 East Main Street, Jackson, Mo.

1267 N. Mount Auburn Road, Cape Girardeau, Mo.

211 Saint Francis Drive, Cape Girardeau, Mo.