Posted on Wed, Apr. 2, 2008
By Joseph N. DiStefano
Doylestown Hospital said yesterday that it had improved its financial position with the $27.5 million sale of its majority interest in the Health & Wellness Center, plus last week's sale of $237 million in new revenue bonds.
Anchor Health Properties L.L.C., a Wilmington medical-facilities-oriented real estate investment trust run by chief executive officer Paula Crowley, said it was buying the center, with a partner that Anchor would not name.
Partly, the new bonds, which priced last Wednesday, will be used to pay off previous debt averaging 5 percent; the new bonds average 4 percent, said chief financial officer Doug Boyle.
The hospital was able to cut its costs thanks in part to its recent growth in the wealthy mid-Bucks County market, plus the hospital's "strong relationships with our banks," Boyle said. PNC Capital Markets L.L.C. is leading the bond sale.
The Health & Wellness Center sale raises a net $3 million in cash and makes it easier for Doylestown to go forward with a new $63 million, 40-bed emergency facility to replace its smaller current facility, said Scott Levy, chief medical officer. The hospital will pay $3 million of that cost, raise $10 million from donors, and use $50 million in bond proceeds, Boyle said.
Moody's Investors Service last month had affirmed Doylestown's "A3" bond rating, but questioned its "highly leveraged" balance sheet.
Scott said the sale of the Health & Wellness Center, in Warrington, reduced financial leverage, while also removing the potential conflict of interest the hospital had when it was, at the same time, landlord, business partner and employer of the physicians who have offices and other facilities at the center.
Contact staff writer Joseph N. DiStefano at 215-854-5194 or jdistefano@phillynews.com.
