Cleveland Clinic Health System Obligated Group - FMSbonds.com
Cleveland Clinic Health System Obligated Group - FMSbonds.com Cleveland Clinic Health System Obligated Group - FMSbonds.com
Consent to Certain AmendmentsAs a result of their purchase of the Series 2008A Bonds, owners thereof will be deemed to have consentedto certain amendments to the Master Trust Indenture. Such amendments relate to, among other things, permittedliens on Property of the Obligated Group in connection with interest rate swaps and the calculation of Revenue andExpenses for purposes of the Master Trust Indenture. The Master Trust Indenture, as summarized in Appendix C,reflects such amendments.Bondholders’ RisksCertain risk factors associated with the purchase of the Series 2008A Bonds are described under the caption“BONDHOLDERS’ RISKS” herein.Continuing DisclosureThe Cleveland Clinic has undertaken all responsibilities for any continuing disclosure to the holders of theSeries 2008A Bonds as described below, and the Commission will have no liability to such holders or any otherperson with respect to such disclosures. In order to provide certain continuing disclosure with respect to itsoutstanding Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commissionunder the Securities Exchange Act of 1934, as the same may be amended from time to time (“Rule 15c2 12”), theCleveland Clinic has entered into an Amended and Restated Master Continuing Disclosure Agreement ( the “MasterContinuing Disclosure Agreement”) with Digital Assurance Certification, LLC (“DAC” or the “DisseminationAgent”), under which the Cleveland Clinic has designated DAC as successor Dissemination Agent. See“CONTINUING DISCLOSURE” below.Availability of DocumentsThis Offering Circular speaks only as of its date, and the information contained herein is subject to change.This Offering Circular will be made available prior to the issuance and sale of the Series 2008A Bonds through theCleveland Clinic, at 9500 Euclid Avenue, Cleveland, Ohio 44195.Descriptions of the Series 2008A Bonds, the Bond Indenture, the State Financing Lease, the Master TrustIndenture and other agreements and documents contained herein constitute summaries of certain provisions thereof,and do not purport to be complete. Reference is made to the Bond Indenture, the State Financing Lease, the MasterTrust Indenture and such other agreements and documents for a more complete description of such provisions. Toobtain copies of such agreements and documents prior to the issuance and sale of the Series 2008A Bonds, requestsshould be directed to the Cleveland Clinic at its address set forth above. Following the issuance and sale of theSeries 2008A Bonds, copies may be examined at the principal office of The Huntington National Bank, 7 EastonOval, EA4E63, Columbus, Ohio 43219.PLAN OF FINANCEThe proceeds of the Series 2008A Bonds will be used, together with the proceeds of the Variable RateBonds, to (i) pay or reimburse the Cleveland Clinic for the payment of a portion of the cost of acquiring,constructing, remodeling and equipping certain of the health care facilities of the Cleveland Clinic and certain otherof the Obligated Issuers, (ii) current refund the Bonds to be Refunded and (iii) pay related expenses.The ProjectsA portion of the proceeds of the Series 2008A Bonds, together with a portion of the proceeds of theVariable Rate Bonds, will be used to pay or reimburse the Obligated Issuers for a number of construction andrenovation projects, including without limitation:(i) acquisition of furnishings and equipment and construction of tenant improvements to aservice center located in a garage/service center building on the campus of the Cleveland Clinic;6
(ii) acquisition of magnetic resonance imaging equipment and renovation of waiting andchanging areas related to the imaging department on the campus of the Cleveland Clinic;(iii) expansion of clinical services, including emergency department, surgical proceduresroom and post-anesthesia care on the campus of the Cleveland Clinic;(iv) acquisition of magnetic resonance imaging equipment and renovation of physicianprocedure rooms at Marymount;(v) construction of a new, approximately 35,000 square foot, multi-story facility at theFamily Health Center located in Brunswick;(vi) construction of a new, approximately 150,000 square foot, multi-story facility that willreplace the existing Family Health Center located in Avon;(vii) construction of a new, approximately 168,000 square foot, multi-story facility at theFamily Health Center located in Twinsburg;(viii) reconstruction, remodeling, equipping, furnishing and improvements of office and relatedfacilities, including the acquisition of existing buildings currently leased by the Cleveland Clinic, at theClinic’s administrative facilities in Beachwood; and(ix) various other construction and renovation projects and equipment acquisitionsundertaken by the Obligated Issuers throughout Northeast Ohio.RefundingsA portion of the proceeds of the Series 2008A Bonds, together with a portion of the proceeds of theVariable Rate Bonds, will be used to refund some or all of the following series of bonds:General(i) County of Cuyahoga, Ohio Hospital Revenue Refunding Bonds, Series 1997A and1997B (The Cleveland Clinic Foundation) (the “1997 Bonds”), $40,620,000 of which are currentlyoutstanding;(ii) County of Cuyahoga, Ohio Hospital Revenue Bonds, Series 2001A (Cleveland ClinicHealth System Obligated Group) Auction Rate Securities (the “2001 Bonds”), $250,000,000 of which arecurrently outstanding;(iii) County of Cuyahoga, Ohio Revenue Bonds, Series 2004A (Cleveland Clinic HealthSystem Obligated Group) (the “2004A Bonds”), $229,375,000 of which are currently outstanding; and(iv) County of Cuyahoga, Ohio Revenue Bonds, Series 2006A and 2006B (Cleveland ClinicHealth System Obligated Group) Auction Rate Securities (the “2006 Bonds” and, together with the 1997Bonds, the 2001 Bonds, and the 2004A Bonds, the “Bonds to be Refunded”), $100,000,000 of which arecurrently outstanding.All of the Bonds to be Refunded are expected to be redeemed on or about October 15, 2008.THE SERIES 2008A BONDSThe Series 2008A Bonds will be dated, bear interest at the annual interest rates and mature in the years andin the principal amounts shown on the cover page of this Offering Circular, subject to redemption prior to maturity7
- Page 1 and 2: NEW ISSUEBOOK ENTRY ONLYSee “RATI
- Page 3 and 4: TABLE OF CONTENTSINTRODUCTORY STATE
- Page 5 and 6: OFFERING CIRCULARRelating to$452,34
- Page 7 and 8: Security and Sources of Payment for
- Page 9: Upon issuance of the Series 2008A B
- Page 13 and 14: $147,200,000 Term Bonds Due January
- Page 15 and 16: that the redemption is conditional
- Page 17 and 18: Use of Certain Terms in Other Secti
- Page 19 and 20: County BondsThe Cleveland Clinic an
- Page 21 and 22: The Cleveland Clinic regularly revi
- Page 23 and 24: ESTIMATED SOURCES AND USES OF FUNDS
- Page 25 and 26: DEBT SERVICE COVERAGEThe following
- Page 27 and 28: MedicareGeneralApproximately 29% of
- Page 29 and 30: there is no assurance that the Obli
- Page 31 and 32: Medicare Conditions of Participatio
- Page 33 and 34: fiscal year’s budget that are in
- Page 35 and 36: Federal Regulatory and Contractual
- Page 37 and 38: Stark-type statutes have fewer exce
- Page 39 and 40: party or for any services rendered
- Page 41 and 42: typically in a position to refer pa
- Page 43 and 44: OhioOhio Certificate of Need Progra
- Page 45 and 46: performance demonstration programs
- Page 47 and 48: manifest injustice would otherwise
- Page 49 and 50: and properties owned or operated by
- Page 51 and 52: plan of reorganization, with one ex
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- Page 55 and 56: The Internal Revenue Service Form 9
- Page 57 and 58: Charity Care, Underinsured and Unin
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(ii) acquisition of magnetic resonance imaging equipment and renovation of waiting andchanging areas related to the imaging department on the campus of the <strong>Cleveland</strong> <strong>Clinic</strong>;(iii) expansion of clinical services, including emergency department, surgical proceduresroom and post-anesthesia care on the campus of the <strong>Cleveland</strong> <strong>Clinic</strong>;(iv) acquisition of magnetic resonance imaging equipment and renovation of physicianprocedure rooms at Marymount;(v) construction of a new, approximately 35,000 square foot, multi-story facility at theFamily <strong>Health</strong> Center located in Brunswick;(vi) construction of a new, approximately 150,000 square foot, multi-story facility that willreplace the existing Family <strong>Health</strong> Center located in Avon;(vii) construction of a new, approximately 168,000 square foot, multi-story facility at theFamily <strong>Health</strong> Center located in Twinsburg;(viii) reconstruction, remodeling, equipping, furnishing and improvements of office and relatedfacilities, including the acquisition of existing buildings currently leased by the <strong>Cleveland</strong> <strong>Clinic</strong>, at the<strong>Clinic</strong>’s administrative facilities in Beachwood; and(ix) various other construction and renovation projects and equipment acquisitionsundertaken by the <strong>Obligated</strong> Issuers throughout Northeast Ohio.RefundingsA portion of the proceeds of the Series 2008A Bonds, together with a portion of the proceeds of theVariable Rate Bonds, will be used to refund some or all of the following series of bonds:General(i) County of Cuyahoga, Ohio Hospital Revenue Refunding Bonds, Series 1997A and1997B (The <strong>Cleveland</strong> <strong>Clinic</strong> Foundation) (the “1997 Bonds”), $40,620,000 of which are currentlyoutstanding;(ii) County of Cuyahoga, Ohio Hospital Revenue Bonds, Series 2001A (<strong>Cleveland</strong> <strong>Clinic</strong><strong>Health</strong> <strong>System</strong> <strong>Obligated</strong> <strong>Group</strong>) Auction Rate Securities (the “2001 Bonds”), $250,000,000 of which arecurrently outstanding;(iii) County of Cuyahoga, Ohio Revenue Bonds, Series 2004A (<strong>Cleveland</strong> <strong>Clinic</strong> <strong>Health</strong><strong>System</strong> <strong>Obligated</strong> <strong>Group</strong>) (the “2004A Bonds”), $229,375,000 of which are currently outstanding; and(iv) County of Cuyahoga, Ohio Revenue Bonds, Series 2006A and 2006B (<strong>Cleveland</strong> <strong>Clinic</strong><strong>Health</strong> <strong>System</strong> <strong>Obligated</strong> <strong>Group</strong>) Auction Rate Securities (the “2006 Bonds” and, together with the 1997Bonds, the 2001 Bonds, and the 2004A Bonds, the “Bonds to be Refunded”), $100,000,000 of which arecurrently outstanding.All of the Bonds to be Refunded are expected to be redeemed on or about October 15, 2008.THE SERIES 2008A BONDSThe Series 2008A Bonds will be dated, bear interest at the annual interest rates and mature in the years andin the principal amounts shown on the cover page of this Offering Circular, subject to redemption prior to maturity7
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