St. Bernards Medical Center

St. Bernards Medical Center is a 438-bed acute care hospital and designated Level III Trauma Center located in Jonesboro, Arkansas. The hospital has become a referral center for a 23-county area in Northeast Arkansas and Southeast Missouri. The hospital is the largest employer in the City. The major expansion of facilities and service is attributable to a strong local economy anchored by the Arkansas State University, Nestle Foods, Unilever, Ritter Communications and several school districts and governmental entities. Due to the strong growth of its local economy the hospital needed to make some large capital improvements and find a financing partner to help them make it happen.

The Solution

After reviewing responses to a request for proposals, the hospital selected Crews and First Security Bank to lead a syndicate of local financial institutions to fund a $40,000,000 portion of the expansion project. Due to this unique structure and our past experience with similar transactions, Crews served as the structuring agent for the bond issue. The bonds are secured by a security interest in the gross receipts of hospital revenues.

The Difference

This transaction demonstrates why Crews has a reputation for working with community leaders to develop innovative financing options for our clients.  Working with the leaders of seven local financial institutions and officials of the hospital, Crews helped organize a local team of community lenders to fund a portion of the expansion project.

The structure of the bonds includes a draw structure that provides the hospital the flexibility to utilize the proceeds as needed as opposed to structure that advances the entire construction proceeds on the date of closing.

Officials of the hospital were able to negotiate the terms and conditions with local community bankers, structure the transaction without a debt service reserve fund and avoid the potential negative arbitrage associated with the investment of the construction fund.