Mesirow Financial ("Mesirow" or the "firm") today announced that its Public Finance and Credit Tenant Lease ("CTL") and Structured Debt Products teams acted as the senior underwriter for one of the first tax-exempt healthcare public-private partnership ("P3") financings in the United States.
Mesirow acted as the financing arm of the winning development team that was assembled by the Board of Trustees of the University of Illinois (the "University") to implement a strategy to outsource the development, design, financing, and maintenance of the University's Outpatient Surgery Center and Specialty Clinics building.
This new 200,000 square-foot clinical building, located across from the University of Illinois Chicago Hospital, is expected to be completed by Fall 2022. This unique ownership and transaction structure allowed the Board of Trustees to exercise control over several aspects of the operation, without bearing the burdens typically associated with the ownership and financing of such a project.
By incorporating a 501(c)(3) ownership structure, the bonds were able to be secured on a tax exempt basis at very competitive borrowing levels. Such P3 financings can often allow issuers to expedite the delivery of essential assets in a more timely and efficient manner while mitigating certain risks that are typically borne in a traditional public finance offering.
"This is a terrific transaction for the University of Illinois, as well as for the State of Illinois because of its public-private partnership model," said Dominick Mondi, Mesirow Financial President & CEO. "This new outpatient healthcare facility brings substantial benefits to the local region—it will create many well-paying jobs, improve overall patient experience, and provide those requiring outpatient surgery with a state-of-the-art facility.
Mr. Mondi added, "I am proud of the work our Public Finance team undertook to complete this P3 financing given the current market conditions. They seamlessly leveraged the expertise of our Infrastructure and Project Finance, CTL and Structured Debt Products and Institutional Sales & Trading businesses to execute this unique transaction in the healthcare space with precision."
"Our work with the Board of Trustees of the University of Illinois is another example of our involvement in cutting-edge municipal finance projects," said Todd Waldrop, Senior Managing Director and Head of Mesirow's Public Finance group. "Given the fiscal constraints that many states, cities, municipalities, and other not-for-profit entities find themselves in today, for many, there is an opportunity to pursue attractive P3 financings to fund critical infrastructure projects including healthcare facilities, academic buildings and student housing facilities."
"Mesirow's specialized institutional businesses and entrepreneurial culture enabled us to work across the firm to develop a well-received, customized P3 solution for the University and its community," said Andrew Minkus, Senior Managing Director, CTL and Structured Debt Products. "We were also able to leverage the strength of Mesirow's balance sheet to enhance execution certainty on this tax-exempt bond offering, which contributed to its attractive pricing in the marketplace."