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Erlanger to issue up to $370 million in bonds; hospital expansion eyed

From the Chattanoogan: Erlanger Health System will go before a city board on Monday seeking the issuance of up to $370 million in bonds for the ho

From the Chattanoogan: Erlanger Health System will go before a city board on Monday seeking the issuance of up to $370 million in bonds for the hospital that a year ago went from a county facility to a nonprofit corporation.

 

Officials said the bonds would go to pay off some earlier debt as well as be used for expanding Erlanger’s local footprint.

 

Jim Coleman, Erlanger CEO, told the County Commission the hospital has been working on a new master plan that should be ready in early July.

 

He said the hospital would be seeking to serve “some of the higher-growing areas outside the city of Chattanooga.”

 

Mr. Coleman said the actual amount of bonds may be in the range of $335 million. There is $141 million owed on a 2014 bond issue for the hospital. Other debt from 2021 is also to be paid off, and there will also be some issuance expense.

 

Of the remaining money, Mr. Coleman said, “It may sound like a lot, but the cost to build a hospital is at $1,000 per square foot.”

 

He added, “It’s a lot of money, but it will go quickly.”

 

Mr. Coleman said the hospital has just carried out a new master plan that should be ready in early July. The bonds are scheduled to be issued in August.

 

He said the bonds would go toward “the first two or three phases of the master plan. The rest will be carried out over the next decade.”

 

The request goes before the Health, Educational and Housing Facility Board.

 

The bonds will be sold to Morgan Stanley & Co. for resale to the public.