On the Web: Delnor/CDH Refinance $190 Million Debt

When it comes to high finance, all I can think of is the Garth Brooks lyric "I got friends in low places."

Low finance is more my speed—just trying to balance that checkbook and make that paycheck stretch another week until—God and Aol willing—the next paycheck comes along.

But there is apparently good strategy involved in debt restructuring and using the bond market to your advantage, and there are even websites devoted specifically to that theme.

The Bond Buyer is in fact "the daily newspaper of public finance" and an expert in the field of government finance. The website has a lot to say on the Illinois Finance Authority and the newly joined Central DuPage Health and Delnor Health System.

The merged hospitals have "received preliminary approval for their direct-purchase transaction of up to $190 million of debt to refund floating-rate securities previously issued by both systems."

"The upcoming deal will refund $58 million of Delnor’s Series 2008A and $127 million of CDH’s 2004A floating-rate bonds. JPMorgan Chase Bank will purchase the unrated bonds from the systems that are still in the process of merging their finances," the Bond Buyer says.

Here's the background. CDH in Winfield and Delnor in Geneva . CDH has 313 beds, Delnor 159.

The two are still creating mountains of paperwork as they consolidate, but one of the first steps is to consolidate their debt. According to the Bond Buyer article, they'll keep a floating-rate debt structure, save a little bit with a slightly better interest rate overall, "but the primary motive is to lower CDH-Delnor’s remarketing and bank enhancement risks," whatever that means.

“We are not under the gun to restructure the bonds, but it’s a good time to do the transaction given the banks’ appetite for direct purchases,” said Brett Tande, the systems’ vice president and treasurer. “The direct purchase allows us to reduce some risks and achieve some savings.”

Central DuPage carries current ratings of AA from Fitch and Standard & Poor’s while Delnor is rated A by Standard & Poor’s.

Anyway, I don't want to copy any more paragraphs from the article—in part because it violates the ethics of aggregation and in part because I don't understand it anyway.

So you can read the article here. I'm pretty sure this is a good thing for both hospitals and the people who use them, aka us.

But if you wade through and find otherwise, please let us know in the comments field.

It's that low place on the page where you'll often find many of my Patchy friends.