Cleveland Clinic Health System Obligated Group - FMSbonds.com
Cleveland Clinic Health System Obligated Group - FMSbonds.com Cleveland Clinic Health System Obligated Group - FMSbonds.com
ESTIMATED ANNUAL DEBT SERVICE REQUIREMENTSThe following table sets forth the estimated annual debt service requirements of the Obligated Group with respect to the Series 2008A Bonds, theVariable Rate Bonds and all other revenue bonds secured by Master Notes. Debt service requirements in each period include principal and interest payments,including mandatory sinking fund requirements.Series 2008A Bonds Variable Rate Bonds 1 Debt Service onPeriod EndingOther Indebtedness 1,2 Total Debt ServiceJanuary 1 Principal Interest Total Principal Interest Total2009 $4,964,444 $4,964,444 $4,997,541 $4,997,541 $40,988,979 $50,950,9642010 23,515,788 23,515,788 23,444,558 23,444,558 40,998,014 87,958,3602011 23,515,788 23,515,788 23,450,000 23,450,000 62,127,380 109,093,1682012 $5,500,000 23,515,788 29,015,788 23,450,000 23,450,000 57,781,999 110,247,7872013 8,445,000 23,295,788 31,740,788 23,455,442 23,455,442 55,024,447 110,220,6772014 8,895,000 22,957,988 31,852,988 23,444,558 23,444,558 54,858,171 110,155,7172015 9,295,000 22,513,238 31,808,238 23,450,000 23,450,000 54,688,081 109,946,3182016 9,950,000 22,048,488 31,998,488 23,450,000 23,450,000 54,486,910 109,935,3982017 7,585,000 21,550,988 29,135,988 23,455,442 23,455,442 57,235,660 109,827,0892018 7,930,000 21,171,738 29,101,738 23,444,558 23,444,558 57,221,140 109,767,4362019 8,250,000 20,775,238 29,025,238 23,450,000 23,450,000 57,195,338 109,670,5752020 4,060,000 20,342,113 24,402,113 23,450,000 23,450,000 61,112,465 108,964,5772021 6,525,000 20,128,963 26,653,963 23,455,442 23,455,442 58,783,879 108,893,2832022 6,815,000 19,786,400 26,601,400 23,444,558 23,444,558 58,771,893 108,817,8522023 7,205,000 19,428,613 26,633,613 23,450,000 23,450,000 58,755,108 108,838,7212024 7,615,000 19,050,350 26,665,350 23,450,000 23,450,000 58,729,723 108,845,0732025 10,365,000 18,650,563 29,015,563 23,455,442 23,455,442 56,399,304 108,870,3082026 14,220,000 18,132,313 32,352,313 23,444,558 23,444,558 53,047,800 108,844,6712027 28,865,000 17,421,313 46,286,313 23,450,000 23,450,000 39,093,590 108,829,9032028 30,855,000 15,941,981 46,796,981 23,450,000 23,450,000 38,760,201 109,007,1832029 32,765,000 14,360,663 47,125,663 23,455,442 23,455,442 38,384,072 108,965,1762030 34,780,000 12,640,500 47,420,500 23,444,558 23,444,558 38,051,906 108,916,9642031 36,965,000 10,814,550 47,779,550 23,450,000 23,450,000 37,660,409 108,889,9592032 18,615,000 8,873,888 27,488,888 23,450,000 23,450,000 57,933,545 108,872,4322033 56,840,000 7,896,600 64,736,600 23,455,442 23,455,442 21,026,016 109,218,0572034 4,912,500 4,912,500 $61,070,000 23,444,558 84,514,558 20,584,665 110,011,7242035 4,912,500 4,912,500 65,320,000 21,312,550 86,632,550 20,682,700 112,227,7502036 4,912,500 4,912,500 81,235,000 19,026,350 100,261,350 7,000,000 112,173,8502037 4,912,500 4,912,500 19,500,000 16,186,880 35,686,880 71,501,624 112,101,0052038 30,000,000 4,912,500 34,912,500 4,885,000 15,497,028 20,382,028 71,441,399 126,735,9282039 3,300,000 3,300,000 36,895,000 15,329,650 52,224,650 71,208,000 126,732,6502040 3,300,000 3,300,000 109,395,000 14,038,325 123,433,325 126,733,3252041 3,300,000 3,300,000 113,220,000 10,211,869 123,431,869 126,731,8692042 3,300,000 3,300,000 117,190,000 6,245,350 123,435,350 126,735,3502043 60,000,000 3,300,000 63,300,000 61,290,000 2,145,150 63,435,150 126,735,150____________________________12For purposes of calculating interest on the Variable Rate Bonds and other bonds bearing interest at a variable rate, assumed average annual interest costs were used based upon a constant interest rateof 3.50% per year.). Interest calculations for outstanding bonds which bear interest at variable rates do not reflect the economic impact of related interest rate agreements.Includes the debt service requirements for the Series 2004B Bonds, the Series 2003A Bonds, the Series 2003C Bonds, the Series 2002 Bonds and the unrefunded portion of the Series 1999B Bonds($45 million). Interest calculations for outstanding bonds which bear interest at variable rates do not reflect the economic impact of related interest rate agreements.20
DEBT SERVICE COVERAGEThe following table sets forth, for the fiscal years ended December 31, 2006 and 2007, the ObligatedGroup’s income available to pay maximum annual debt service on Master Notes of the Obligated Group assumingthe issuance of the Series 2008A Bonds and the Variable Rate Bonds.(in thousands)December 31,2006 2007Excess of revenues over expenses $389,035 $379,966Plus depreciation, amortization and interest 229,803 242,251(Less increase) plus decrease in unrealized netgains on investments and value of interest rateswaps(56,447) 55,079Funds available for debt service $562,391 $677,296Maximum annual debt service 1 $126,736 $126,736Historical coverage of pro forma debt service 4.44x 5.34x_________________________1Maximum annual debt service on outstanding Master Notes issued to secure or guarantee related revenue bonds. It has beenassumed all indebtedness bearing interest at a variable rate bears interest at a constant interest rate of 3.50% per annum. It has alsobeen assumed that the Variable Rate Bonds are issued in an aggregate principal amount of $670,000,000.GeneralBONDHOLDERS’ RISKSThe following is a discussion of certain risk factors that could affect payments to be made with respect tothe Series 2008A Bonds. The discussion is not exhaustive, should be read in conjunction with all other parts of thisOffering Circular. It should not be considered as a complete description of all risks that could affect such payments.Prospective purchasers of the Series 2008A Bonds should analyze carefully the information contained in thisOffering Circular, including the Appendices hereto, and additional information in the form of the completedocuments summarized herein, copies of which are available as described in this Offering Circular. See the caption“INTRODUCTORY STATEMENT — Availability of Documents” above.As set forth under “SECURITY FOR THE SERIES 2008A BONDS,” the Series 2008A Bonds will bepayable by the Commission solely from Hospital Receipts (i.e., all rentals and other moneys received by theCommission or the Bond Trustee pursuant to the State Financing Lease with the Cleveland Clinic, including,without limitation, Basic Rent and moneys and investments credited to the Special Funds created under the BondIndenture, and income from the investment of those moneys) and from amounts payable under the Sixtieth MasterNote and the Variable Rate Note assigned by the Commission to the Bond Trustee. No representation or assurancecan be made that revenues will be realized by the Obligated Issuers in amounts sufficient to provide funds forpayments on the Series 2008A Bonds when due and to make other payments necessary to meet the obligations of theObligated Issuers. Further, there is no assurance that the revenues of the Obligated Issuers can be increasedsufficiently to compensate for cost increases that may occur.The receipt of future revenues by the Obligated Issuers is subject to, among other factors, federal and statelaws, regulations and policies affecting the health care industry and the policies and practices of major managed careproviders, private insurers and other third party payors and private purchasers of health care services. The effect onthe Obligated Issuers of recently enacted laws and regulations and recently adopted policies, and of future changesin federal and state laws, regulations and policies, and private policies, cannot be determined at this time. Loss ofestablished managed care contracts of an Obligated Issuer could also adversely affect its future revenues.21
- 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 and 10: Upon issuance of the Series 2008A B
- Page 11 and 12: (ii) acquisition of magnetic resona
- 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: ESTIMATED SOURCES AND USES OF FUNDS
- 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
- Page 53 and 54: percentage may be composed wholly o
- Page 55 and 56: The Internal Revenue Service Form 9
- Page 57 and 58: Charity Care, Underinsured and Unin
- Page 59 and 60: • Proposals to eliminate the tax-
- Page 61 and 62: acting in the capacity of underwrit
- Page 63 and 64: Frederick R. Nance, Regional Managi
- Page 65 and 66: FINANCIAL POSITION — D. BALANCE S
- Page 67 and 68: The CommissionBecause the Series 20
- Page 69 and 70: APPENDIX ACLEVELAND CLINIC HEALTH S
- Page 71 and 72: TABLE OF CONTENTSPageINTRODUCTION .
- Page 73 and 74: This Appendix to the Offering Circu
ESTIMATED ANNUAL DEBT SERVICE REQUIREMENTSThe following table sets forth the estimated annual debt service requirements of the <strong>Obligated</strong> <strong>Group</strong> with respect to the Series 2008A Bonds, theVariable Rate Bonds and all other revenue bonds secured by Master Notes. Debt service requirements in each period include principal and interest payments,including mandatory sinking fund requirements.Series 2008A Bonds Variable Rate Bonds 1 Debt Service onPeriod EndingOther Indebtedness 1,2 Total Debt ServiceJanuary 1 Principal Interest Total Principal Interest Total2009 $4,964,444 $4,964,444 $4,997,541 $4,997,541 $40,988,979 $50,950,9642010 23,515,788 23,515,788 23,444,558 23,444,558 40,998,014 87,958,3602011 23,515,788 23,515,788 23,450,000 23,450,000 62,127,380 109,093,1682012 $5,500,000 23,515,788 29,015,788 23,450,000 23,450,000 57,781,999 110,247,7872013 8,445,000 23,295,788 31,740,788 23,455,442 23,455,442 55,024,447 110,220,6772014 8,895,000 22,957,988 31,852,988 23,444,558 23,444,558 54,858,171 110,155,7172015 9,295,000 22,513,238 31,808,238 23,450,000 23,450,000 54,688,081 109,946,3182016 9,950,000 22,048,488 31,998,488 23,450,000 23,450,000 54,486,910 109,935,3982017 7,585,000 21,550,988 29,135,988 23,455,442 23,455,442 57,235,660 109,827,0892018 7,930,000 21,171,738 29,101,738 23,444,558 23,444,558 57,221,140 109,767,4362019 8,250,000 20,775,238 29,025,238 23,450,000 23,450,000 57,195,338 109,670,5752020 4,060,000 20,342,113 24,402,113 23,450,000 23,450,000 61,112,465 108,964,5772021 6,525,000 20,128,963 26,653,963 23,455,442 23,455,442 58,783,879 108,893,2832022 6,815,000 19,786,400 26,601,400 23,444,558 23,444,558 58,771,893 108,817,8522023 7,205,000 19,428,613 26,633,613 23,450,000 23,450,000 58,755,108 108,838,7212024 7,615,000 19,050,350 26,665,350 23,450,000 23,450,000 58,729,723 108,845,0732025 10,365,000 18,650,563 29,015,563 23,455,442 23,455,442 56,399,304 108,870,3082026 14,220,000 18,132,313 32,352,313 23,444,558 23,444,558 53,047,800 108,844,6712027 28,865,000 17,421,313 46,286,313 23,450,000 23,450,000 39,093,590 108,829,9032028 30,855,000 15,941,981 46,796,981 23,450,000 23,450,000 38,760,201 109,007,1832029 32,765,000 14,360,663 47,125,663 23,455,442 23,455,442 38,384,072 108,965,1762030 34,780,000 12,640,500 47,420,500 23,444,558 23,444,558 38,051,906 108,916,9642031 36,965,000 10,814,550 47,779,550 23,450,000 23,450,000 37,660,409 108,889,9592032 18,615,000 8,873,888 27,488,888 23,450,000 23,450,000 57,933,545 108,872,4322033 56,840,000 7,896,600 64,736,600 23,455,442 23,455,442 21,026,016 109,218,0572034 4,912,500 4,912,500 $61,070,000 23,444,558 84,514,558 20,584,665 110,011,7242035 4,912,500 4,912,500 65,320,000 21,312,550 86,632,550 20,682,700 112,227,7502036 4,912,500 4,912,500 81,235,000 19,026,350 100,261,350 7,000,000 112,173,8502037 4,912,500 4,912,500 19,500,000 16,186,880 35,686,880 71,501,624 112,101,0052038 30,000,000 4,912,500 34,912,500 4,885,000 15,497,028 20,382,028 71,441,399 126,735,9282039 3,300,000 3,300,000 36,895,000 15,329,650 52,224,650 71,208,000 126,732,6502040 3,300,000 3,300,000 109,395,000 14,038,325 123,433,325 126,733,3252041 3,300,000 3,300,000 113,220,000 10,211,869 123,431,869 126,731,8692042 3,300,000 3,300,000 117,190,000 6,245,350 123,435,350 126,735,3502043 60,000,000 3,300,000 63,300,000 61,290,000 2,145,150 63,435,150 126,735,150____________________________12For purposes of calculating interest on the Variable Rate Bonds and other bonds bearing interest at a variable rate, assumed average annual interest costs were used based upon a constant interest rateof 3.50% per year.). Interest calculations for outstanding bonds which bear interest at variable rates do not reflect the economic impact of related interest rate agreements.Includes the debt service requirements for the Series 2004B Bonds, the Series 2003A Bonds, the Series 2003C Bonds, the Series 2002 Bonds and the unrefunded portion of the Series 1999B Bonds($45 million). Interest calculations for outstanding bonds which bear interest at variable rates do not reflect the economic impact of related interest rate agreements.20
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