Palomar Health $28,715,000 Certificates of Participation
February 10, 2021
|Cain Brothers, a division of KeyBanc Capital Markets served as Placement Agent for the private placement of $28,715,000 of fixed rate tax-exempt Certificates of Participation (the “2021 COPs”) on behalf of Palomar Health.
Palomar is a healthcare district and a political subdivision of the State of California, located in San Diego County. The District owns and operates two acute care hospitals; the 288 bed Palomar Medical Center Escondido and the 107 bed Palomar Medical Center Poway. Palomar’s coordinated system of care also provides post-acute, home health and hospice services throughout San Diego County.
The 2021 COPs are rated BBB by S&P and BBB- by Fitch. The proceeds will primarily be used to fund the construction of a new 1,900 space parking garage and system-wide signage improvements.
Given Palomar’s strong market reputation and their status as a frequent issuer in the capital markets, Cain Brothers and the District’s Financial Advisor formulated a strategic plan of finance that focused on a private competitive bid process. A targeted group of institutional accounts, largely familiar with the underlying credit and security, were given the opportunity to participate. With Cain Brothers’ marketing and structuring expertise and favorable market conditions, the financing received strong investor participation evidenced by 8 competitive bids. The private nature of the financing led to an expedited and streamlined execution process with a single investor, culminating in 7-year fixed rate COP’s yielding 1.579% to the 6-year call date. Maturity and call dates were designed to dovetail with the District’s existing debt portfolio. The 2021 COP financing achieved management’s goals of obtaining attractive capital costs with efficient execution and terms consistent with Palomar’s Master Trust Indenture.