Union Hospital in Western Indiana Receives $266.6M Mortgage Refinancing

TERRE HAUTE, IND. — AMS Health Care Mortgage Corp., Piper Jaffray & Co. and JLL Capital Markets have closed on the funding of a $266.6 million FHA/GNMA-insured mortgage loan for Union Hospital in Terre Haute.

Founded in 1892, Union Health provides care for the 277,657 residents of west central Indiana and eastern Illinois. The regional healthcare system is comprised of the flagship Union Hospital (Terre Haute), a 347-bed acute care hospital; Union Hospital Clinton, a 25-bed critical access hospital; and two rural health clinics (Clay City, Ind., and Marshall, Ill.), employing a total of 2,878 physicians and staff.

The loan refinancing, insured under HUD’s Section 242 Mortgage Insurance for Hospitals program, significantly reduces the system’s annual debt service, saving Union Health and its patients approximately $148 million over the life of the loan.

AMS is an FHA-approved mortgage lender that specializes in obtaining financing for hospitals. Piper Jaffray, an investment bank specializing in healthcare finance, worked closely with AMS in structuring the transaction, assisting Union Health in defeasing its existing tax-exempt debt and placing the GNMA securities with end investors.

JLL, working closely with AMS and Piper Jaffray, is the FHA mortgagee of record and will service the loan over its 25-year term.

“This refinancing positions Union Health well to continue its mission for the future in serving the healthcare needs of the people in the communities we are committed to serve,” says Wayne Hutson, executive vice president and chief financial officer of Union Hospital.

“HUD’s Section 242 Mortgage Insurance program allows Union Health to realize meaningful savings, deleverage the organization and enhance the financial health of our organization. For our patients, this means we can continue to offer cost-effective care and expand our program offerings for the health and well-being of the people in the communities we serve, now and in the future,” added Hutson.

The flexible terms of the program and the broad distribution of securities to end investors resulted in one of the lowest interest rates achieved for a healthcare system participating in the HUD hospital facilities program, according to AMS and Piper Jaffray.

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. In 2015, JLL Capital Markets completed $140 billion in investment sales and debt and equity transactions globally. The firm’s capital markets team comprises more than 2,000 specialists operating around the world.

— Matt Valley

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