Based on the cost estimates for the proposed University Hospital inpatient and outpatient facilities for the South Option at $753.0M, the following table compares the projected 2013 financial results under the financial plan and subsequent update to Standard & Poor’s (S&P) BBB rated medians.
There are issues that surface when considering the project financing. The State of Louisiana has indicated that any financing for the proposed hospital must be independent of the state debt cap. Even though the projected 2013 results above compare favorably to the S&P medians, the sheer amount of the financing and the resulting 2008 - 2009 financial profile would make stand-alone financing a challenge.
It would appear that the best financing option for LSU HCSD would be FHA-insured financing through the HUD 242 program. The chief challenge in pursuing HUD 242 financing would be the customary requirement for 10% equity contribution from its borrowers. LSU HCSD should retain a qualified financial adviser/investment banker to assist in evaluating future choices.
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