This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Citrus Memorial Faces Bankruptcy Without Hospital Corp. Lease Deal

NEW YORK (The Deal) -- Citrus Memorial Hospital could be facing bankruptcy protection if it doesn't complete a lease transaction with Hospital Corp. of America (HCA - Get Report) an analyst has warned.

The Inverness, Fla.-based 198-bed community hospital, which is located roughly 75 miles north of Tampa and is officially called Citrus Memorial Health Foundation, is confident that the transaction will be completed this fall and that payments from HCA on the lease deal will be used to repay its outstanding bond debt, said Citrus Memorial spokeswoman Katie Mehl in a phone interview Thursday.

The hospital is operated by Citrus Memorial Health under a long-term lease with Citrus County Hospital Board. Through the transaction, the board will lease the facility to Hospital Corp. of America and Citrus Memorial Health Foundation will step out, Mehl explained.

The hospital is a not-for-profit facility, but under a new lease with HCA, the latter will operate it as a for-profit enterprise, Mehl said.

She wouldn't comment on the exact value of the transaction, but said that it will provide Citrus Memorial will enough proceeds to repay the company's bond debt, cover its employee pension costs and leave "many millions left over" to be used for charity care in the community, among other things. Mehl explained that HCA would likely make an up-front payment for the lease.

"We are hoping to have a definitive agreement in the next few months and close in the fall," she said.

Citrus Memorial has two series of secured bonds, the first issued in 2002 and the second issued in 2008. The $37.46 million outstanding on its 2002 bonds bear interest between 6.25% and 6.375%, and have a final maturity of Aug. 15, 2023.

Meanwhile, the $7.65 million outstanding on its 2008 bonds are priced at 1.2% and mature on Oct. 1, 2018.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
HCA $77.74 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs