Refinancing To Reduce BHB’s Service Payments

December 4, 2015

Bermuda Hospitals Board [BHB] and Paget Health Services [PHS]  announced that a refinancing of the Acute Care Wing Public Private Partnership Project’s senior debt has taken place, which will see BHB’s annual service payments reduced by $527,250 per year for the rest of the contract term of 29 years.

King Edward Memorial Hospital KEMH Acute Care Wing Emergency Department Bermuda, September 13 2014 (1)

BHB CEO, Venetta Symonds, comments: “PHS’s financing solution encouraged PHS to refinance its debt in the first 20 years of the concession. Our contract with PHS ensured that BHB would benefit from such a refinancing.

“The early timing of the refinancing benefits BHB as we continue to work hard to control costs while focusing resources on delivering quality care. The reduction of $527,250 in our annual service payments for the next 29 years helps us support our services in these challenging times.”

PHS Director, Robert Wotherspoon, adds: “We were very pleased to complete the important refinancing of senior debt related to the Acute Care Wing, which showed both PHS and BHB working together in partnership.

“This refinancing allows both BHB and PHS to benefit from improved financing terms and does not preclude future refinancing opportunities should the conditions again prove to be favourable.

“In keeping with the Project Agreement, BHB will benefit from an equal share of any future refinancing activity.”

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Comments (10)

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  1. San George says:

    How nice – we go from 20 years to 29 years to pay off the debt. Great deal for taxpayers.

    The airport will go from 30 years to 50 years if arrivals keep declining.

    Quo Fata Ferunt

  2. WarwickBoy says:

    What was the cost of this re-financing I wonder? Lenders don’t give up a guaranteed stream of future income at a set level for another stream of equal length at a lower level without some form of compensation. If there was optionality built into the original financing agreement then that could have been factored into the original pricing, but it would be nice to learn the details.

    • Spectator says:

      All BHB’s costs for the refinancing were covered by PHS.

    • oh dear says:

      ‘Learn the details’ from the BHB – you must be in cookoo land. They did not inform the true finance cost of the ACW in the first place.

  3. Vote for Me says:

    The public need more detail to assess the financial impact of the refinancing.

    Did we simply extend the term and therefore pay more interest?
    Did we pay any penalty tied to the refinancing?
    Did they change lenders?
    What was the original rate vs the new rate?
    Was there any change in security?
    What prompted the refinancing?

    Enquiring minds want to know…

  4. Y-gurl says:

    The whole thing was a plot to make more money (not for Bermuda) and the OBA need to stop forcing the airport down our throats and pay attention to what’s probably going to happen that project a few years after completion.

  5. oh dear says:

    …and the questions are on-going. What is the current position of the WHY IT MATTERS fund raising campaign? Where did the $7m come from – really – to make up the first payment of $40m and so on?

    • what a waste says:

      … I would also love to know what the true raised amount was after paying the 5 staff salaries over the several years of the campaign? Doubt it amounts to the savings from 1 years refinancing…

  6. Some Beach says:

    I look outside their parking lot and view BMW,Mercedes,Volkswagen….they don’t need money…they need a foot up their…