The Coookeville City Council has granted Cookeville Regional Medical Center permission to refinance several bonds.
CRMC CEO Paul Korth said three of the four bonds come due in the summer of 2020.
“Currently the medical center has a little over $64 million in debt,” Korth said. “These will be non-bank qualified tax-exempt bonds, so they won’t have any effect on the city’s borrowing of the bonds that you normally do. These are non-bank qualified debt.”
A fourth bond isn’t due until 2034, but Korth said it currently has a declining rebate.
“That declining rebate has come to a point where it’s beneficial now for us to refinance with the low rates and take value of that,” Korth said. “They will be on a floating rate. Basically, that floating is the calculation of LIBOR plus 175-percent times 82.5-percent. Currently, that calculates out to be about 3.29-percent. We are able to enter into a five-year fixed swap agreement. Swap agreements are less than the current floating rate, which is very unusual. We’re going to be able to fix this at 2.92-percent.”
A resolution approved by the city council Thursday allows CRMC to finalize and execute the refinancing of the bonds.