Hospital waits for USDA word on financing options

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As the Swift County-Benson Health Services works to secure United States Department of Agriculture (USDA) funding for construction of an assisted living/memory care facility, it is exploring several options.

Those options center on ways to get around covenants attached to the issuance of its 2014 bonds that restrict its ability to issue new debt for the project.

In 2014, the hospital refinanced its 2007 bonds, which were used to build the surgical center and new emergency room. While refinancing allowed it to get a lower interest rate it also triggered rules that don’t allow it to pay off the bonds early without substantial penalty. It is estimated that paying off the remaining $5.9 million bond balance prior to 2022 could cost it around $600,000.

Paying off those 2014 bonds is required prior to arranging any new financing because USDA will not take a second position to the bondholders of the 2014 issuance.

SCBH also has a $2.5 million bond outstanding that was used to pay for Affiliated Community Medical Centers building adjacent to the hospital.

Swift County’s Board of Commissioners was given an update on the status of the hospital’s effort to structure a financial deal with USDA at its meeting last Tuesday.

“We’ve been continuing to work with the local (USDA) office out of Willmar,” SCBHS Chief Financial Officer Enderson said. Included in the discussions has been the USDA’s state contact person....


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