|
A health care provider's capital structure impacts all
aspects of its operations. Access to capital is imperative
for meeting strategic plans and implementing new programs.
The cost of debt reduces the financial resources available
for patient care. Debt covenants limit the options available
for implementing new initiatives.
We at HCNA offer advisory services to assist with accessing
capital in ways consistent with the provider's mission
and strategic objectives. We consider ourselves members of
the provider's team, and are responsible for helping
to carry out its mission. This perspective guides the analyses
and recommendations we provide. We provide assistance in four
major areas:
- Development of a capital formation strategy
- Minimization of debt service and release of restricted
reserves
- Management of the debt issuance process
- Negotiation of debt terms and covenants
HCNA assists providers in determining the best method for
funding capital projects. If the source of funds is the incurrence
of new debt, HCNA assists its clients with the following services:
- Identifying the security available to obtain and service
the debt
- Analyzing the type of debt that best meets the provider's
objectives
- Analyzing the financial impact of the debt on the organization
- Identifying potential lenders or guarantors of the debt
- Preparing an information package for potential lenders
or guarantors
- Coordinating the activities of the financing team
In periods of low interest rates, it is frequently possible
to reduce existing debt service. For each of our clients,
we examine the existing debt structure for opportunities to
reduce debt service. We make recommendations for debt refinancing
and restructuring, as well as examining the balance sheet
and legal documents for cash reserves that may be released.
Incurring debt, especially tax-exempt debt, is a complicated
undertaking. HCNA manages the debt issuance process for its
clients by providing the following services:
- Preparing and submitting applications to the relevant
governmental agencies
- Monitoring the processing of applications and assisting
in negotiations and reviews
- Assisting in the preparation of the legal documents that
secure the debt
- Assisting in the preparation of the disclosure document
- Preparing and/or reviewing the debt sizing analysis
- Assisting in the selection of an investment banking firm,
if bonds are to be issued, and participating in the negotiations.
Debt covenants have an important impact on the operations
of a health care facility. HCNA assists in negotiating the
terms and covenants for the debt, with a special focus on
how the covenants will impact the ability of the health care
provider to implement its mission and strategic plans.
HCNA speaks the language of providers and lenders. We at
HCNA use our many years of experience to coordinate all aspects
of the debt issuance process.
|
