The refinancing of Hall County-backed Northeast Georgia Health System hospital bonds will save more than $23 million over the life of the debt, according to county and hospital officials.
A quorum of three county commissioners — Billy Powell, Scott Gibbs and Jeff Stowe — approved the transaction at a special called meeting Wednesday. Board of Commissioners Chairman Richard Higgins was at a meeting in Atlanta with County Administrator Randy Knighton. Commissioner Kathy Cooper could not attend the special meeting.
The original 2010 issuing of bonds in excess of $450 million was financed at an interest rate of just more than 5 percent, according to Tony Herdener, chief financial officer at NGHS. He said the new debt service is at a rate of less than 4 percent and is extended through 2045.
“There is pressure on interest rates going higher, so we wanted to capture this because of the uncertainty of the future,” Herdener told the board of commissioners.
Commissioners approved a resolution Wednesday that added a supplemental with the new debt service to an intergovernmental agreement entered into with the Hospital Authority last month.
Herdener said the Hospital Authority was set to approve the same type of resolution Wednesday.
Describing the transaction like the refinancing of a home, Herdener said there’s a savings each year with the lower interest that adds up over the life of the debt service generating approximately $23.5 million in savings.
“It’s like refinancing the home mortgage, but we just did it a much bigger scale,” he said.
Capital improvements made with the 2010 bonds include the North Patient Tower at the main hospital campus in Gainesville.