About this bond issuance
The proceeds of the 2016 Bonds, together with other available funds, will be applied to: (a) payment of the costs of the construction, acquisition and installation of various capital improvements to be located at the healthcare and related facilities or portions thereof owned and/or operated by UPMC and its Subsidiary Hospitals, at locations in the Commonwealth of Pennsylvania; (b) the current refunding of $20,844,413, which the Corporation made on April 1, 2016, which was applied, together with other available moneys, to the payment of all of the principal of the outstanding Erie County Hospital Authority, Revenue Bonds, Series 2006 (Hamot Health Foundation) aggregating $23,000,000, and (c) payment of the costs associated with the issuance of the 2016 Bonds.
ObligorThe obligor is the organization that holds ultimate responsibility for the bond issuance, and will ensure that investors get repaid.
The issuer, Pennsylvania Economic Development Financing Authority, is issuing on behalf of the University of Pittsburgh Medical Center (UPMC).
UPMC is a Pennsylvania nonprofit corporation which was established in 1982. The Corporation is the parent corporation of its subsidiary hospitals and numerous other owned and controlled entities. The UPMC system is the largest health care system in Pennsylvania and operates primarily in western Pennsylvania, while providing specialized services to patients from throughout the United States and the world. The system includes: UPMC; sixteen hospitals in western Pennsylvania and a number of other corporations.
UPMC doing business as University of Pittsburgh Medical Center or is one of the world's leading integrated delivery and financing systems ("IDFS"). UPMC's more than 20 hospitals and more than 500 doctors' offices and outpatient sites comprise one of the largest non-profit health care systems in the United States. UPMC is based in Pittsburgh, Pennsylvania, and primarily serves residents of western Pennsylvania. It also draws patients for highly specialized services from across the nation and around the world. In addition, UPMC exports its expertise to other parts of the world and to the health care industry. Approximately 5,700 physicians are affiliated with UPMC, including nearly 3,600 who are employed by UPMC. UPMC also offers a variety of insurance products that cover more than 2.9 million lives.
UPMC is widely recognized for its innovations in patient care, research, technology and healthcare management.
UPMC is also:
- The largest health care delivery system in Pennsylvania
- The largest nongovernment employer in the Commonwealth, with more than 60,000 part-time and full-time employees - Closely affiliated with the University of Pittsburgh of the Commonwealth System of Higher Education (the "University"), which is among the top five recipients of National Institutes of Health ("NIH") research funding with more than $475 million during the federal fiscal year ended September 30, 2015
- Ranked twelfth on the list of America's Best Hospital's Honor Roll by U.S. News & World Report in 2016
- One of the largest cancer networks in the country with more than 40 locations
- One of the leading transplant programs in the world
- A provider of health care services globally with an international footprint established in twelve countries on four continents.
Total operating revenues of UPMC were $12.8 billion during the twelve months ended June 30, 2016. These total revenues do not include external research funding which is accounted for separately through the University.
IssuerOften the obligor. However, sometimes issuers partner with an authorized conduit financing non-profit within their state or city to issue the bonds.
The Authority is a public instrumentality and body corporate and politic of the Commonwealth of Pennsylvania (the "Commonwealth"), created pursuant to the Pennsylvania Economic Development Financing Law, Act No. 102, approved August 23, 1967, P.L. 251, as amended, including the amendments effected by Act No. 48, approved July 10, 1987, P.L. 273, Act No. 74, December 17, 1993, P.L. 490 and Act No. 44, July 2, 2013 (the "PEDFA Law") to provide financing for qualifying projects in the Commonwealth.
AuthorityBefore an issuer can raise money for a project, they must first have the legal authority to do so. This authority is sometimes preceded by a general election, and awarded after the successful passing of a bond measure.
The 2016 Bonds are authorized to be issued pursuant to the PEDFA Law and a resolution adopted by the Board of the Authority on July 20, 2016 (the "Authorizing Resolution").
SecurityThe security section is a breakdown of the funds an issuer is planning to use to repay its investors. This repayment can come from a variety of sources, including local taxes.
The 2016 Bonds are limited obligations of the Authority, payable solely from the Trust Estate created under the Bond Indenture which consists principally of payments to be made by the Corporation under the Loan Agreement. Under the Loan Agreement, the Corporation is obligated to make loan payments which have been scheduled to be sufficient to pay, inter alia, the principal of and interest on the 2016 Bonds, when due, and certain other obligations. The payment obligations of the Corporation under the Loan Agreement with respect to the 2016 Bonds will be secured by the issuance of a promissory note in an amount equal to the aggregate principal amount of the 2016 Bonds.
TrusteeThe trustee is a third-party, often a large bank or financial institution, responsible for all payment flows between an issuer and an investor. This trustee is in charge of processing coupon payments.
The Bank of New York Mellon Trust Company, N.A., Pittsburgh, Pennsylvania