Minnesota expands conduit issuer into healthcare
3 min read
The Minnesota Health and Education Facilities Authority announced it will help nonprofit healthcare organizations finance capital projects.
The conduit issuer was formerly the Minnesota Higher Education Facilities Authority.
“We officially became able to do healthcare on Aug. 1, so we’re just starting out,” Executive Director Barry Fick told The Bond Buyer. “We are in the process now of making all the internal decisions about what the application looks like, etcetera. We will be in a position by the end of October” to accept applications for financing.
This expansion marks the first time Minnesota has had a statewide conduit issuer for healthcare.
Bonding for healthcare issuers had “always been done on a local governmental level prior to now,” Fick said. “We think that we offer a very good proposition for the healthcare industry.”
He stressed that the authority is “a very lean and efficient organization,” with only two full-time staffers, so it can keep its fees low.
“We basically just break-even,” he said. “Our fee for higher education folks is well below the one-eighth of a percent that the government allows (organizations) to charge.”
Gov. Tim Walz signed the health and human services omnibus bill that made this expansion possible
It also raised the authority’s borrowing limit to $4 billion from $2 billion and changed its name.
Fick said it’s been a long road. “We’ve actually been at this for four-plus years, to get this through the legislature,” he said. “It would have been approved earlier, but the pandemic delayed things.
“We have been persistent,” he added. “We had engaged a consulting and lobbying firm … and they were helpful to get us an audience with legislators. … We were finally successful this last year in getting it through.”
The higher ed side, Fick said, is “not a particularly active market” right now.
The authority just closed a refunding transaction that generated roughly $1 million of savings for the borrower, and it has another transaction coming to market later this winter, he said. But “people are just kind of lying low and not doing much” in the sector at the moment, he noted.
At the same time, they’ve seen increased demand from the healthcare sector, Fick said.
“We perceived a need for healthcare financing in the marketplace at a cost-effective rate,” he said. “It allows us to diversify our portfolio so we can continue to provide strong service to both going forward.”
To learn more, healthcare nonprofits can visit the authority’s website,
“We are proud of our more than 50 years of serving Minnesota colleges and universities and are excited the legislature chose to expand our work to hospitals, nursing homes, and clinics across Minnesota,” Bonnie Anderson Rons, chair of the authority’s board of directors, said in a statement.
