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Paynesville Press - December 31, 2003

Hospital district proceeds with refinancing

By Michael Jacobson

The Paynesville Area Hospital District Board of Directors took the following actions at a special meeting on Tuesday, Dec. 23.

• The board authorized administration to proceed with refinancing $12 million of the district's long-term debt, which totals $15 million. By refinancing over 20 years, at an initial rate of 4.75 percent, building the new debt around the five obligations that cannot be refinanced, the district can reduce its annual debt service payments from $1.29 million to $1.1 million.

The board held a special meeting in order to authorize the refinancing before the end of 2003. As a public institution, PAHCS can only refinance $10 million in a calendar year, so they plan to refinance $2 million in 2003 and $10 million in 2004. Community First National Bank will be the lead lender and handle $5 million of the refinance.

Administration requested a special meeting in order to authorize the refinance in time to complete the portion for 2003.

The move - along with reductions in operating costs and the recent switch to cost-based reimbursement for Medicare through critical-access designation - should help PAHCS's financial position.

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