15450 So. Outer Forty Rd.
Suite 230
Chesterfield, MO 63017
(636) 519-0700
(636) 519-0792 Fax
info@mohefa.org
MHEFA
Association
Memberships
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REFUNDING OF PRIOR DEBT
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Health care and educational institutions often refinance to take advantage of lower interest rates in the market place than existed at the time of prior financing. Similarly, such institutions often wish to avoid restrictive covenants or collateral requirements contained in a prior financing that would no longer be necessary in a new financing. The Authority has the ability to issue “refunding bonds” which can accomplish these goals. Such bonds often can be issued to refund the institution’s obligations even if the Authority was not involved in the original financing. Such “refundings” may, depending on the terms of the prior financing and what is advantageous at the time, either be “current” refundings in which the prior debt is paid off within 90 days of the issuance of the new bonds, or “advance” refundings in which the proceeds of a new bond issue are placed in escrow to pay off the old bonds at some designated time in the future. The Tax Reform Act of 1986 placed restrictions on advance refundings, yet most institutions are still able to take advantage of this financing technique. |
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Missouri Health and Educational Facilities Authority
15450 South Outer Forty Rd., Suite 230, Chesterfield, MO 63017
(636) 519-0700 (636) 519-0792 Fax
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