By Cristal Cody
Springdale, Ark., Jan. 23 - Kettering Health Network Obligated Group's $187.815 million variable rate hospital facilities revenue refunding and improvement bonds had a 3% initial interest rate set at pricing, but the Federal Reserve's rate cut is expected to lower the interest cost at the first reset, according to a source with the hospital.
The $93.575 million series 2008A bonds and $94.24 million series 2008B bonds are municipal insured floaters and will bear interest in a weekly mode beginning Feb. 1.
The variable rate demand notes had a 3% initial interest rate set when it priced Thursday, but this week will fall since rates are lower, said Ed Mann, treasurer for Kettering Health Network.
The bonds mature Dec. 31, 2008, to Dec. 31, 2047.
Merrill Lynch & Co. is the remarketing agent managing the bonds. The trust indenture permits conversion of the bonds, in whole by series, to a daily, R-Floats, special R-Floats, term, fixed, auction, unit, indexed, and stepped coupon rate.
Proceeds will be used to refinance prior debt, reimburse capital spent and fund new projects, such as the heart hospital tower on the group's health campus in Kettering, Ohio, Mann said.
Issuer: | Kettering Health Network Obligated Group
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Issue: | Revenue refunding and improvement bonds
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Type: | Negotiated
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Amount: | $187.815 million ($93.575 million 2008A/$94.24 million 2008B)
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Maturities: | 2008 to 2047
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Initial interest rate: | 3%
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Pricing date: | Jan. 17
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Dealer: | Merrill Lynch & Co.
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Ratings: | Moody's: Aaa
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| Standard & Poor's: AAA
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