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April 1, 2024

Hartford HealthCare to use $150M in new debt financing for systemwide facility upgrades

RENDERING | CONTRIBUTED A rendering of the Connecticut Proton Therapy Center planned for 932 Northrop Road in Wallingford.
By David Krechevsky

Hartford HealthCare will use up to $150 million in new debt financing to fund significant upgrades at its various hospitals and a new proton therapy center it’s developing in Wallingford in partnership with Yale New Haven Health.

The debt is being issued through the Connecticut Health and Educational Facilities Authority (CHEFA), a quasi-public state agency that issues tax-exempt bonds and debt on behalf of nonprofit institutions.

CHEFA is involved in most debt issuances by Connecticut hospitals, whether they are traditional public bond offerings or private placement deals with banks.

Since nearly all Connecticut hospitals are nonprofit organizations, they have access to tax-exempt debt issuances, which makes borrowing cheaper and more affordable.

CHEFA’s board of directors in December voted unanimously to approve Hartford HealthCare’s financing request, which includes two separate direct placements with Morgan Stanley, according to CHEFA and HHC.

One direct placement of up to $35 million is expected to close by the end of April, HHC said, and will be used to help finance the planned proton therapy center, which is slated to be built in Wallingford, at 932 Northrop Road.

Yale New Haven Health, Hartford HealthCare and Proton International announced in April 2022 that they secured final approval to build and open the $75 million Connecticut Proton Therapy Center, which will provide an advanced form of cancer radiation treatment.

There are just over 40 proton therapy centers in the U.S., but none in Connecticut. The closest centers are in New York and Massachusetts.

The partners originally planned to open the 25,000-square-foot facility sometime in 2025, but that timeline got delayed by the pandemic, hospital officials have said.

Their new goal is to break ground on the project in the coming months and have it completed in 2026.

Another direct placement of up to $115 million closed in January, HHC said, and will be used to finance equipment purchases and property upgrades at Hartford HealthCare’s seven hospitals and other facilities.

The planned funding allocations, records show, will include:

  • Up to $80 million for Hartford Hospital, which has 867 licensed beds.
  • Up to $20 million for Backus Hospital in Norwich (233 licensed beds).
  • Up to $20 million for the Hospital of Central Connecticut in New Britain (446 licensed beds), the Bradley Memorial campus in Southington and Hartford HealthCare Cancer Institute in New Britain.
  • Up to $15 million for St. Vincent’s Medical Center in Bridgeport (520 licensed beds).
  • Up to $10 million for Windham Community Memorial Hospital (144 licensed beds).
  • Up to $10 million for Charlotte Hungerford Hospital in Torrington (122 licensed beds).
  • Up to $10 million for MidState Medical Center in Meriden (156 licensed beds).
  • Up to $8 million for HHC Medical Group, with locations throughout the state, including Avon, Bridgeport, Bristol, Cheshire, Derby, Enfield, Farmington, Glastonbury, Guilford, Manchester, among others.
  • Up to $1 million for medical offices in Stamford, Trumbull and Fairfield.

Hartford HealthCare didn’t provide specific details about the new equipment purchases or types of facility upgrades it is planning.

However, in a statement to the Hartford Business Journal, Hartford HealthCare said its hospitals and healthcare systems face growing demands, so it is “making the necessary ongoing investments in the latest equipment that will allow our acute-care campuses to continue providing communities with world-class care at the most affordable cost.”

It added that the joint venture with Yale New Haven Health to develop the proton therapy center in Wallingford “will allow us to provide leading-edge, innovative treatment options for patients and further enhance the quality of cancer care in the future.”

Hartford HealthCare in fiscal year 2023 reported nearly $6 billion in operating revenue and an operating surplus of $96.6 million, according to data from the Office of Health Strategy.

HHC reported an overall surplus of $134 million in fiscal year 2023, and total long-term debt of $1.4 billion, according to OHS data.

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