AIDEA issues $122.7 million tax-exempt bonds for Providence Health
The Alaska Industrial Development and Export Authority, AIDEA, has issued $122.72 million in tax-exempt “conduit” revenue bonds for Providence Health and Services, the agency announced Nov. 27.
Conduit bonds involve financing done by the authority, usually tax-exempt, on behalf of another institution, in this case Providence Health and Services. The U.S. Internal Revenue Service allows for certain types of tax-exempt financing by private entities for certain public purposes.
AIDEA has been designated by the IRS to issue tax-exempt bonds in Alaska for projects that qualify under the IRS code.
The recent bond issue is one of the larger tax-exempt conduit financings AIDEA has done. In 2010 the authority issued $29.2 million in conduit revenue bonds to finance new heart center at Fairbanks Memorial Hospital. In 2009 AIDEA issued $90.1 million in conduit bonds also for Fairbanks Memorial, to help the hospital in refinancing bond debt.
Since the inception of its conduit bond program AIDEA has issued $1.1 billion in bonds to fund 310 projects.
The latest bond issue will provide funds to finance Providence Alaska Cottages, a 96-bed nursing home consisting of eight cottages and a commons building, currently under construction on Boniface Parkway in Anchorage, and to finance capital improvements at Providence Alaska Medical Center, on Providence Drive in Anchorage.
The improvements at Providence Alaska Medical Center include renovations of existing facilities and approximately 85,782 square feet of new construction. The project includes renovations and expansion of a Newborn Intensive Care Unit, an obstetrical unit, two open-heart surgery suites, expansion of the pharmacy service, sterile processing and materials management.
These projects are expected to create 85 new permanent positions. Additionally, the work requires an estimated 403 construction positions.
Because it was issued as conduit revenue bonds, neither AIDEA’s credit nor the state’s is at risk in connection with these bonds.
The Alaska Industrial Development and Export Authority is a public corporation of the state. The authority provides financing for industrial and business development through a number of programs in addition to the conduit bond financing. Through its business participation loan programs, AIDEA works with commercial banks in partnerships on long-term financing for business expansion.
AIDEA also invests directly in projects, such as the Ketchikan Shipyard, the Skagway Ore Terminal and, most recently, in a jack-up rig that will be used in Cook Inlet oil and gas exploration. The jack-up rig investment was done in a partnership with the company planning to use the rig, Buccaneer Energy of Australia.