An Alabama Hospital Secures $20.8 MM + Non-Recourse Refinance in Preemptory Move
The executives at a surgical hospital in Alabama met to decide whether to sit tight with what was generally considered a favorable interest rate for the remainder of their financing or move immediately to explore the market with the objective of extending the term without increasing the loan spread. One of the primary considerations was the long-standing relationship that the hospital had with its current bank and the concern over upsetting that relationship by shopping the financing.
Eventually, the decision was made to move forward with CMAC and the result exceeded expectations on more than one front. The short remaining term was replaced with a 10-year rate that was nearly a full percentage point less than the existing loan. Additionally, the financing was secured without recourse to the principals.
This transaction came on the heels of the refinancing of a very similar privately owned Arkansas hospital where CMAC reduced a rate (renegotiated only 6 months earlier) to produce a $2MM interest expense savings.
CMAC’s Director of Finance, Elizabeth Allport, stated that both of these hospitals were exceptionally well run and that she was able to obtain the exceptionally favorable pricing in both cases by leveraging the negotiated rates from other recent CMAC deals in other areas of the country.