CapitalSource Provides $71 Million Loan to Tri-
City Medical Center
Creative, comprehensive solution alleviates instability in cost of financing for government-owned hospital in
San Diego County, California
March 18, 2010 10:05 AM Eastern Daylight Time
CHEVY CHASE, Md.--(EON: Enhanced Online News)--CapitalSource, one of the leading commercial lenders in
the United States, said today it is providing a $71 million senior loan to Tri-City Medical Center, a 397-bed, acute
care hospital serving the North Coastal San Diego region of California.
The financing includes a $51 million secured term loan and a $20 million revolving line of credit. The hospital, owned
by the Tri-City Healthcare District, is using the term loan to repay high-interest Auction Rate Securities (ARS) debt
and ensures a consistent, predictable cost of debt. The accounts receivable-based line of credit is being used for
working capital and planned capital expenditures, including the build-out of a medical office building for its
physicians.
The hospital considered several options for refinancing the ARS before turning to CapitalSource. The traditional
source of outside financing for public healthcare providers (including Hospital Districts) has been through the bond
markets. While other commercial banks and lenders shied away from working with a public hospital, CapitalSource
pursued the opportunity, engaging California counsel to do an exhaustive review of the California Code regarding
lending to a government entity. CapitalSource was able to successfully meet the challenges of financing a public
healthcare provider under California law.
“CapitalSource executed a creative, comprehensive solution to our financing needs,” said Larry Anderson, CEO of
Tri-City Medical Center. “The structure of this transaction alleviates the instability in our cost of financing and gives
us the liquidity to move forward with planned capital improvements and other initiatives.”
“We appreciate the opportunity to help Tri-City ensure it ma