$354,220,000 ISSUED ON BEHALF OF ATLANTIC HEALTH SYSTEM TO
RESTRUCTURE AUCTION RATE DEBT

(Trenton) Today and yesterday, the New Jersey Health Care Facilities Financing Authority (the "Authority") successfully closed on $354,220,000 in bonds on behalf of Atlantic Health System ("AHS") in order to refund its auction rate debt.

            AHS had approximately $335 million worth of auction rate securities outstanding through Authority issuances in 2003, 2004, 2006 and 2007.  After failed auctions in February, these bonds hit maximum interest rate levels.  In order to restructure the debt as quickly as possible, Bank of America and JPMorgan Chase provided interim financing to tender AHS' auction rate bonds.  AHS then began a new financing through the Authority to refund the interim debt. 

            The 2008 AHS bonds are structured in three series.  Series 2008A was a fixed rate issue of unenhanced bonds totaling $177,110,000 sold based on AHS' rating of "A+/A1." Goldman, Sachs & Co. offered to underwrite this series with serials from 2009 to 2023 at yields ranging from 3% to 4.97% and a term bond in 2027 yielding of 5.03%.  The overall true interest cost for this first series was 5.025%. 

            Series 2008B and Series 2008C refinanced AHS' remaining interim debt through variable rate demand bonds.  The two latter series total $88,555,000 each.  Credit and liquidity support are provided by a direct pay letter of credit from Bank of America for Series 2008B and by a direct pay letter of credit from JPMorgan Chase for Series 2008C.  The initial weekly variable interest rate for each of these transactions was 1.65%.   

            Created in 1972 by an act of the Legislature to provide not-for-profit health care providers with access to low-cost capital, the Authority is the primary issuer of municipal bonds for New Jersey's health care organizations. During its 35-year history, the Authority has issued over $13 billion in bonds on behalf of over 140 health care organizations throughout the state.

###