Hillcrest Healthcare System
The sale of Hillcrest reflects one of the largest and most complex "conversions" in history.
| Category |
Description |
| Profile |
- Based in Tulsa, OK
- 14 hospital system, 1,308 beds
- Net revenues, $500 million; total assets, $488 million; long-term debt, $225 million
|
| Situation |
- Debt downgraded to "B"
- No access to capital
- Operations sound
- High financial leverage
- Complicated urban/teaching/rural structure
- Difficult market structure
|
| Outcome |
- Divestiture to strong for-profit company
- Long-term commitment to provide capital
- Maintenance of mission and teaching programs
- Creation of substantial foundation
|
| Special Features |
- Retirement of bonds became central issue of closing
- Bonds trading at 65 prior to transaction
- Non-callable, unclear re. defeasance
- Bondholders ultimately insisted on defeasance
- Compromise reached to utilize Federal Aagencies' securities
|
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