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April 26, 2011 PRESENTATION TO: Puerto Rico Hospital Association.

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Presentation on theme: "April 26, 2011 PRESENTATION TO: Puerto Rico Hospital Association."— Presentation transcript:

1 April 26, 2011 PRESENTATION TO: Puerto Rico Hospital Association

2 Table of Contents 1

3 Alternative Structures Update 2 Section I

4 Alternative Structures Update 3 Temporary measures created by American Recovery and Reinvestment Act (ARRA) and other congressional action have largely expired  Build America Bonds Taxable bonds with 35% subsidy  Bank Qualified Bonds Limits reverted to lower levels ($30mm vs $10mm) Per bond issuer not borrower  Federal Home Loan Bank Can no longer support tax-exempt hospital financing  USDA available funding amount has reverted to previous levels  2009 – 2010 were quadruple previous years  FHA implements refinancing program for hospitals

5 Alternative Structures Update 4 USDA Financing Options  Project must be in town or rural area with up to 20,000 population  Grants  Direct Loan Program Typically $1 – $3 million (Largest was $31 million) Historically limited availability 4.25% ; 40 year amortization  Guaranteed Loan Program Federal/state budget allocations generally limit to $10 million but may be larger US Government guarantees 90% of the loan 25-30 year amortization

6 FHA Office of Healthcare Programs 5 Section II

7 FHA’s Office of Healthcare Programs Section 242 – Office of Hospital Facilities Section 232 – Office of Residential Care Facilities MISSION: To enable the affordable financing of needed health care facilities, thereby improving access to quality health care nationwide and contributing to HUD's community development goals, at no cost to the taxpayer. 1 6

8 Definition of Terms HUDU.S Department of Housing and Urban Development FHAFederal Housing Administration 242Section 242 of the National Housing Act (NHA) gives HUD/FHA the authority to insure mortgages for acute care hospitals. 232Section 232 of the National Housing Act (NHA) gives HUD/FHA the authority to insure mortgages for nursing homes, assisted living, and other long-term care residential facilities 223 (f) Section 223 (f) of the NHA Act gives HUD/FHA the authority to insure mortgages for 100 % refinancing loans pursuant to 242 and 232 241Section 241 of the NHA gives HUD/FHA the authority to insure mortgages for supplemental loan for HUD portfolio hospitals. 2 7

9 Program Accomplishments Support HUD’s mission, the Secretary’s goals, and the Commissioner’s priorities – for example:  Run programs that complement President’s healthcare agenda — Reduce cost of care and increase accessibility – Allow borrowers to achieve at least an AA credit rating  Strengthen communities - healthcare facilities are economic engines — Employ 7.9 million, support $2.7 trillion in economic activity nationwide — FY10 FHA hospital projects: 15,700 jobs, $3.9 billion in economic stimulus — Improve access to quality healthcare 3 8

10 Hospitals That Use FHA  FHA serves hospitals nationwide  Acute care hospitals  Rural and Critical Access Hospitals  Large urban teaching hospitals  University hospitals  Not-for-profit, for-profit, and government-owned hospitals Capital Health System Trenton NJ $755.9 million mortgage 9 9

11 Borrowers include small critical access hospitals… Rio Grande Hospital (CAH) Del Norte, CO $11.9 million insured mortgages 10

12 …and large urban hospitals. Hospital for Special Surgery New York, NY 11

13 North Valley Hospital Whitefish, MT Summit Hospital Phenix City, AL Morehead Memorial Hosp. Eden, NC Platte Valley Hospital Brighton, CO Montefiore Med Ctr Bronx, NY (2) Hospital for Special Surgery New York, NY St. Luke's Roosevelt NY, NY Methodist Hospital Arcadia, CA Hillcrest Baptist Med Ctr Waco, TX Ridgecrest Regional Ridgecrest, CA Western MD Health System Cumberland, MD Onslow Memorial Hospital Jacksonville, NC Kaleida Health System Buffalo, NY (3) New York Hosp Queens, NY Commitments/Insured Loans (55) [18] Applications in Process (7) [3] Pending Applications (15) [3] Chambers Mem.Hosp. Danville, AR Melissa Memorial Holyoke, CO Delta Regional Med Ctr Greenville, MS Johnston Memorial Smithfield, NC Hudson Valley Courtland Manor, NY NY Presby Hosp NY, NY 3-27-10 Chatham Hospital Siler City, NC Baptist Hosps SE Texas Beaumont, TX Highline Medical Center Burien, WA Matagorda County Hospital District, Bay City, TX Guadalupe Regional Medical Center Seguin, TX Rio Grande Hosp. Del Norte, CO Blue Mountain Hosp. Blanding, UT HOSPITAL BUSINESS FY05 to date North Canyon Medical Center Gooding, ID Capital Health Systems, Trenton NJ Fall River Health Services Hot Springs, SD The Memorial Hospital Craig, CO Barrett Hospital and Healthcare, Libby, MT Carlinville Area Hospital, Carlinville, IL Pinckneyville Community Hosp. Pinckneyville, IL Baton Rouge General Medical Center Baton Rouge, LA Loris Healthcare System Loris, SC University of New Mexico, Albuquerque, NM Ellis Hospital, Schenectady, NY Medical Univ. of S. Carolina Charleston, SC Wills Memorial Hosp Washington, GA Oswego Hospital Oswego, NY Coulee Community Hospital Grand Coulee, WA Meadows Regional Med Ctr Vidalia, GA Wheeling Hosp., Wheeling, WV New Regional Med. Ctr., East Norriton, PA Allen Memorial Hospital Moab, UT Mennonite General Hospital Cayey, PR Cambridge Memorial Hospital, Cambridge, NE Rowan Regional Hosp. Salisbury, NC Edgerton Hosp. Edgerton, WI Baraga County Memorial Hosp L’anse, MI Red = Critical Access Hospital LRGH Healthcare Laconia, NH Kennewick General Hospital, Kennewick, WA Mendota Community Hospital Mendota, IL FF Thompson Hospital Canandaigua, NY Stillwater Community Hosp, Columbus, MT Valley Baptist Med Center, Harlingen and Brownsville, TX Santiam Memorial Hosp. Stayton, OR Meadows Med. Center, North Las Vegas, NV Bucyrus Hosp. Bucyrus, OH (2 ) Community Memorial Hosp. Ventura, CA) Kirby Hosp Monticello, IL Neshoba County General Hospital, Philadelphia, MS Effingham Hosp. Springfield, GA Albany Med Center Albany, NY Mercy Hospital Chicago, IL Lakeway Regional Med Center, Lakeway, TX Sandoval Regional Med Center, Rio Rancho, NM Hayes Green Beach Hosp., Charlotte, MI Unity Hospital, Rochester, NY Parkview Hospital, Riverside, CA 12

14 Organization  Transition from HHS completed 4 years ago  Turnaround Team initiated 3 years ago  New organization – Office of Hospital Facilities within Office of Healthcare Programs – established 2 years ago  Divisions for Underwriting and Asset Management established one year ago Volume  80% of all insured loans added in last 8 years History of Office of Hospital Facilities 13

15 Office of Hospital Facilities Qualifications 14 Former Health Care Executives, including: - 8 former health care system executives 8 Former Business Executives 10 Professional Society Fellows 1 Former State Finance Authority Executive 25+ Graduate Degrees, including: - 2 Juris Doctors - 20 Masters (11 MBAs, 9 MPHs) 6 Accountants / CPAs 1 Professional Engineer 1 Registered Nurse 14

16 Deputy Assistant Secretary for Healthcare Programs ----------------------- Associate Deputy Assistant Secretary Policy and Continuous Improvement Advisor Council of Experts - 4 Consultants Health Systems Advisor Director, Office of Architecture and Engineering Director, Office of Hospital Facilities Director, Underwriting Director, Asset Management Director, Office of Residential Care Facilities Office of Healthcare Programs Organization Chart Section 232 Section 242 Healthcare Programs Special Assistants Administrative Staff OAE Secretary of Housing and Urban Development Assistant Secretary of Housing / FHA Commissioner Appointee Level Deputy Assistant Secretary for Risk Management Risk Management Team Leader, Turnaround Team 15

17 Section 232 Program FHA insures mortgages on Nursing Homes, Intermediate Care, Assisted Living, and Board and Care Facilities under the Section 232 of the National Housing Act. — Over 2,500 facilities presently insured under this program — The facilities are located in 49 states, the District of Columbia and the Virgin Islands. Over $16.0 billion in mortgages are insured under this program 15 16

18 242 Program Performance Since 1968, over 400 commitments totaling over $17 billion Currently, over 110 insured loans totaling over $9 billion Low default rate– program operates at no cost to the taxpayer Reduced processing time– 9.5 months to 3 months LEAN Office process streamlining 17 Insurance Commitments Issued (cumulative)

19 Total Loans Outstanding97 Total Dollars Outstanding$8.3 Billion Average Loan Size$83 Million # of Hospitals in Portfolio77 # of Hospitals Troubled*9 Unpaid Balance Troubled (%)$309 Million (3.7%) Claims 2000-20104 Claim Rate Net of Recoveries0.64% 18 242 Program Performance *Troubled hospitals place on Priority Watch List and assigned to Hospital Turn Around Team. Portfolio Overview at end of FY 2009

20 FYTotalApprovals% Approved 200711873% 2008302170% 2009432047% 19 242 Program Performance As demand has increased, a lower percent of potential applicants has passed initial screening. Preliminary Reviews Completed

21 Economic Stimulus and Job Creation Economic activity generated during construction ≈ $3.9 Billion Construction jobs created ≈ 4,700 Hospital jobs from the projects ≈ 2,500 Community jobs after projects ≈ 8,500 * Results from IMPLAN Model 20

22 Attractive Program Features No maximum loan amount Loan term up to 25 years FHA insures 99% of mortgage Fixed annual premium of 0.5% of remaining balance One-time fees of 0.8% Section 241 supplemental loan advantage 14 21

23 22 FHA pre-qualification requirements  Needed and necessary community institution  Three year average profit margin > 0%  Three year average debt service coverage ratio ≥ 1.25x  Ability to mortgage assets  Loan-to-value less than 90%

24 Advantages of FHA Insured Mortgages 23  No affirmative ongoing financial covenants (no minimum Debt Service Coverage Ratio (DSCR), operating margin, or days cash on hand)  Closing costs are financed in the mortgage  High maximum Loan-to-Value ratio (up to 90% of replacement cost)  Loan is non-recourse  Loan is assignable  Pre-payment restrictions (non-call period or “lock-out”) match bonds or GNMA funding agreements

25 24 A/E Drawings: Schematic Design Design Development Working Drawings Site WorkSupervision Construction Manager Selection Part A - Value Engineering Part B - GMP Mobilization and Site Preparation Early Start of Construction Financial Feasibility Consultant Selection Financial Feasibility Study Feasibility Sensitivity Studies Respond to questions Agreed Upon Procedures Preliminary Mortgage Sizing 2013 Application Mortgage Sizing 2013 Modified Mortgage Sizing 2013 Modified Mortgage Sizing 2013 Final Mortgage Sizing 2013 HUD Need Tool Previous Participation 2530 Proposed Covenants Modified Covenants Funding Source Level 1 Report Environmental Assessment Special Conditions Modified Special Conditions Closing days HUD Review cycle: 12 weeks Application Preparation time: 12 to 14 weeks Pre - application Period: 14 to 30 days days HUD Review 4 to 6 weeks Pre-Application 2 to 4 weeks Funding 4 to 8 weeks Application Preparation 10 to 12 weeks HUD Risk Review 4 weeks FHA Timeline

26 The application process is complex, the bond rating the highest, and FHA a “relationship lender” 25 The application process to obtain a Commitment to Insure is complex If FHA agrees to insure the loan, the debt obligations would be highly rated.  Tax-exempt or taxable bonds would carry an “AA” rating at minimum.  GNMAs issued to fund the loan would carry a rating of “AAA”. FHA is a “relationship lender” that would not attempt to force a borrower out of the program. FHA takes a practical and helpful stance should the Project become troubled.

27 The Borrower applies to the mortgage lender for an Insured Loan 26 HUD Mortgage Lender Tax-exempt bonds GNMA securities Mortgage Loan Borrower

28 Tax-exempt bond funded FHA Insured Mortgages are “structured financings” 27 In the late 1970’s, investment bankers developed a methodology to use the FHA Mortgage Insurance benefits as “collateral” for the issuance of tax- exempt bonds.  HUD does not insure bonds  FHA Tax-exempt bond issues are “collateralized mortgage obligations”, that is the FHA insurance benefits are used to assure payment on tax-exempt bonds  All of the standard components of an FHA Insured Hospital mortgage loan exist

29 The collateralized mortgage obligation structure adds complexity in exchange for a lower mortgage rate 28 Authority HUD Mortgage Lender/ Trustee Bond Proceeds Mortgage Loan LOC Bank Borrower Underwriters

30 Case Study 29 Borrower: Mennonite General Hospital (est. 1948) Borrower Type: Acute Care Hospital System Borrower Locations: Cayey (155 Beds), Aibonito (150 Beds), Cidra Par Amount: $129,966,100 Deal Uses: Refinancing, Renovations, 61-bed Addition, Garage Addition, HVAC conversion to water cooled chillers Deal Structure: FHA 242 GNMA Enhancement: FHA 242 Mortgage Insurance Rating: AAA (S&P) Term/Amortization: 25 Years Notes: — MGH sponsors two Section 202 Elderly Housing Projects (Casa Aibonito and Casa Barranquitas) — MGH Sponsors a HUD Section 811 project for persons with disabilities (Aurora Home) — First 242 deal in Puerto Rico since 1985 — Seven 242 deals have been funded in Puerto Rico since 1973

31 Recent Transactions 30 $129,966,100 FHA / GNMA Insured Mortgage Loan January 20, 2010 Mennonite General Hospital in Cayey, Puerto Rico retained AMS to refinance its non-investment grade tax-exempt bond debt, approximately $48,000,000, and expand one of its three hospitals for a total FHA Insured Mortgage Financing of $129,966,100. Mennonite has served the people of the central highlands of Puerto Rico for 65 years as the near sole provider of medical care. Begun as an outpatient clinic, Mennonite has grown to three hospitals, a major outpatient treatment center, three HUD housing facilities for the aged, including a section 811 facility for the disabled elderly. Operating their newest hospital, completed in 1998, at over 100% occupancy required Mennonite to add a major expansion project. Concerned with the rising cost of energy, the proposed Project also included conversion of air-cooled chillers with water cooled equipment. Mennonite also operates a health plan and manages three 24-hour emergency rooms for the Government of Puerto Rico. Mennonite funded its FHA Insured Hospital Mortgage loan with GNMA Securities. $129,966,100 FHA / GNMA Insured Mortgage Loan January 20, 2010 Mennonite General Hospital in Cayey, Puerto Rico retained AMS to refinance its non-investment grade tax-exempt bond debt, approximately $48,000,000, and expand one of its three hospitals for a total FHA Insured Mortgage Financing of $129,966,100. Mennonite has served the people of the central highlands of Puerto Rico for 65 years as the near sole provider of medical care. Begun as an outpatient clinic, Mennonite has grown to three hospitals, a major outpatient treatment center, three HUD housing facilities for the aged, including a section 811 facility for the disabled elderly. Operating their newest hospital, completed in 1998, at over 100% occupancy required Mennonite to add a major expansion project. Concerned with the rising cost of energy, the proposed Project also included conversion of air-cooled chillers with water cooled equipment. Mennonite also operates a health plan and manages three 24-hour emergency rooms for the Government of Puerto Rico. Mennonite funded its FHA Insured Hospital Mortgage loan with GNMA Securities.

32 Recent Transactions 31 $196,920,400 FHA Insured Tax-exempt Mortgage Revenue Bonds November 5, 2010 The Unity Hospital of Rochester is the acute care provider of Unity Health System, a network of senior care services located in western Monroe County, New York. The proposed project is an addition and total renovation of this 1974 hospital. Upon project completion, Unity will be state of the art. The complex nature of the construction of additions to and total renovation of an operating hospital while it remains in full service added to the necessity of close cooperation between the construction project team, the financing team, and required significant coordination with the New York State Department of Health. AMS worked closely with one of the leading underwriters of municipal bonds to achieve a timely and cost effective financing for Unity. A pre-existing Section 232 financing for a sister company presented some special opportunities to work closely with the two divisions of the HUD Office of Healthcare Programs: hospitals and nursing homes. $196,920,400 FHA Insured Tax-exempt Mortgage Revenue Bonds November 5, 2010 The Unity Hospital of Rochester is the acute care provider of Unity Health System, a network of senior care services located in western Monroe County, New York. The proposed project is an addition and total renovation of this 1974 hospital. Upon project completion, Unity will be state of the art. The complex nature of the construction of additions to and total renovation of an operating hospital while it remains in full service added to the necessity of close cooperation between the construction project team, the financing team, and required significant coordination with the New York State Department of Health. AMS worked closely with one of the leading underwriters of municipal bonds to achieve a timely and cost effective financing for Unity. A pre-existing Section 232 financing for a sister company presented some special opportunities to work closely with the two divisions of the HUD Office of Healthcare Programs: hospitals and nursing homes.

33 Recent Transactions 32 $755,874,500 FHA / GNMA Insured Mortgage Loan April 7, 2009 AMS staff served as mortgage banker to Capital Health System (CHS) is a two-hospital system with both of its primary acute care hospitals located in urban neighborhoods. CHS had limited ability to expand or replace either of its two hospital campuses. CHS identified three potential Greenfield sites suitable to build a replacement hospital for its Mercer campus. The proposed project with an estimated cost of approximately $650 million would include a new 230- bed acute hospital, medical office building and central energy plant. This coupled with the approximately $200 million of refinancing resulted a total project requirement of approximately $880 million. Once CHS had obtained its mortgage insurance commitment, December 2008, for $755,874,500, a funding source became the next key decision point: taxable or tax-exempt. Reinvestment rates were at an all time low, resulting in over $50 million of expected negative arbitrage. The capital markets had collapsed. It was decided by the project team that the best use of the mortgage insurance commitment would be through a taxable GNMA funding. The GNMA option eliminated the negative arbitrage on the construction portion of the loan, did not require a Debt Service Reserve Fund, bond ratings, an Official Statement, or an issuing authority. $755,874,500 FHA / GNMA Insured Mortgage Loan April 7, 2009 AMS staff served as mortgage banker to Capital Health System (CHS) is a two-hospital system with both of its primary acute care hospitals located in urban neighborhoods. CHS had limited ability to expand or replace either of its two hospital campuses. CHS identified three potential Greenfield sites suitable to build a replacement hospital for its Mercer campus. The proposed project with an estimated cost of approximately $650 million would include a new 230- bed acute hospital, medical office building and central energy plant. This coupled with the approximately $200 million of refinancing resulted a total project requirement of approximately $880 million. Once CHS had obtained its mortgage insurance commitment, December 2008, for $755,874,500, a funding source became the next key decision point: taxable or tax-exempt. Reinvestment rates were at an all time low, resulting in over $50 million of expected negative arbitrage. The capital markets had collapsed. It was decided by the project team that the best use of the mortgage insurance commitment would be through a taxable GNMA funding. The GNMA option eliminated the negative arbitrage on the construction portion of the loan, did not require a Debt Service Reserve Fund, bond ratings, an Official Statement, or an issuing authority.

34 Recent Transactions 33 $422,060,000 FHA Insured Mortgage Hospital Facilities and Revenue Refunding Bonds December 2004 AMS staff was mandated to assist by Medical University Hospital Authority (MUHA) of South Carolina in Phase I of its replacement project. MUHA is an instrumentality of the State of South Carolina, created to operate the teaching hospitals of the Medical University of South Carolina (MUSC), the oldest medical school in the South, founded in 1824. MUHA was founded to move the hospitals of MUSC out of the governmental sector and into the not-for-profit arena. South Carolina has been growing recently through an influx of retirees from the Northeast, who expect and demand access to high quality academic medical centers. The MUSC hospitals had operated at a loss for a considerable time, with limited access to capital and tired facilities. MUHA changed the operating result and now need to change the facilities. October 2002, AMS began developing a plan to utilize FHA- 242 Mortgage Insurance to fund Phase I of an ambitious $900 million total replacement and expansion plan for MUHA. In December 2004, MUHA funded its capital needs through a taxable and tax-exempt bond issue, $61,000,000 Central Energy Plant, and $50,000,000 tax-exempt equipment lease. $422,060,000 FHA Insured Mortgage Hospital Facilities and Revenue Refunding Bonds December 2004 AMS staff was mandated to assist by Medical University Hospital Authority (MUHA) of South Carolina in Phase I of its replacement project. MUHA is an instrumentality of the State of South Carolina, created to operate the teaching hospitals of the Medical University of South Carolina (MUSC), the oldest medical school in the South, founded in 1824. MUHA was founded to move the hospitals of MUSC out of the governmental sector and into the not-for-profit arena. South Carolina has been growing recently through an influx of retirees from the Northeast, who expect and demand access to high quality academic medical centers. The MUSC hospitals had operated at a loss for a considerable time, with limited access to capital and tired facilities. MUHA changed the operating result and now need to change the facilities. October 2002, AMS began developing a plan to utilize FHA- 242 Mortgage Insurance to fund Phase I of an ambitious $900 million total replacement and expansion plan for MUHA. In December 2004, MUHA funded its capital needs through a taxable and tax-exempt bond issue, $61,000,000 Central Energy Plant, and $50,000,000 tax-exempt equipment lease.

35 Section II AMS Health Care Mortgage Corporation FHA Licensed Mortgagee 34

36 AMS Health Care Mortgage Corporation is a FHA approved lender committed to meeting the capital needs of hospitals  Founded in 2008, AMS’s staff consists of seasoned professional staff with 97 years of mortgage banking and real estate experience.  We have completed 3 FHA hospital mortgage insured transactions valued at $1.2 billion in the past three years.  AMS brings an independent view to the table and is committed to providing a financing tailored to the needs and priorities of Clients.  Our experience will make a complex process understandable and manageable for your clients. 35

37 AMS is a leader in FHA hospital finance 36 2009 and 2010 Mortgage Banking Rankings Rank FirmVolume% 1 AMS 1,082,761,000 38.6% 2 Tyll & LaVigne 473,815,900 16.9% 3 Bank of America 359,156,000 12.8% 4 Goldman Sachs 292,500,000 10.4% 5 Walker & Dunlop 168,372,800 6.0% 6 Lancaster Pollard 159,176,200 5.7% 7 Innovative Capital 84,755,000 3.0% 8 Dougherty 76,650,000 2.7% 9 Berkadia 63,000,000 2.2% 10 Red Capital 36,175,000 1.3% 11 Column Guaranteed 2,985,700 0.1% 12 Capmark Finance 2,345,000 0.1% 2,801,692,600100% Source: Hud, for Gov't fiscal years ended 9/30/2009 and 9/30/2010 $755,874,500 $196,920,400 $129,966,100

38 THANK YOU www.amshcm.com 37

39 Appendix A Resumes 38 Resumes

40 Financing Team Experience Joseph A. Spiak President AMS Health Care Mortgage Corporation  Mr. Spiak has been active in the field of healthcare administration and finance for over 30 years. He began his healthcare career in the US Army, serving in the Medical Service Corps, at several assignments including the First Infantry Division, First Medical Battalion. As a graduate of the Columbia University School of Public Health, Joe did his residency at Montifiore Medical Center, New York, Department of Community Medicine. For seven years he served as Director of Planning, United Hospital, Port Chester, New York. It was at United that Joe was introduced to the FHA Section 242 Mortgage Insurance program. Acting as United’s point person for the financing, he organized the application and approval process. United had the distinction of being the first publicly offer FHA/GNMA tax-exempt hospital issue. From United Joe moved to Merrill Lynch, where he spent 18 years in Healthcare Public Finance and continued a career of completing 242 insured mortgages, note worthy was the then largest FHA insured transaction, Buffalo General Hospital, $210 million. His career has included all types of hospital financing including Merrill Lynch’s first fixed to floating swap. In 2000 Joe joined Banc of America Securities and as head of its Healthcare Finance Department and established an FHA insured hospital mortgage program. The $422 million Medical University Hospital Authority, Charleston, SC, financing was the flagship deal for Banc of America Securities. In 2004 Joe joined UBS Investment Bank, where he established an FHA Hospital Mortgage funding program. In 2008 Joe established AMS Health Care Mortgage Corporation, to provide FHA mortgage banking services to select hospitals and health systems. 39

41 Financing Team Experience James H. Cooper, Jr. Senior Vice President AMS Health Care Mortgage Corporation  Mr. Cooper joined AMS in 2009 as Senior Vice President. Mr. Cooper has completed more than $2 billion of tax-exempt and taxable financings for healthcare organizations and facilities serving the needs of America's senior population. He has extensive experience executing complex transactions utilizing a variety of financing modes and structures, including letters of credit, bond insurance, credit ratings, unenhanced non-rated structures, taxable and tax-exempt seed capital, and derivatives. Prior to joining AMS, he was an Executive Director in the Healthcare group at J.P. Morgan where he led the firm’s senior living effort. Previously, Mr. Cooper was a Senior Vice President with Herbert J. Sims & Co. where, in addition to traditional bond underwriting, he oversaw the firm's risk management activities successfully structuring nearly $1 billion of hedging and reinvestment transactions. Mr. Cooper earned a B.A. from Washington & Lee University, and a M.A. from the Monterey Institute of International Studies. 40

42 Financing Team Experience John T. Sefton Senior Vice President AMS Health Care Mortgage Corporation  Mr. Sefton served as a partner for 23 years with the national law firm of Foley & Lardner LLP. His practice included financings, securitizations, commercial real estate loans, negotiated acquisitions and bank regulatory work. Mr. Sefton was also a member of the senior living practice group, and participated in loans and workouts for continuing care retirement communities. Mr. Sefton received his BA degree magna cum laude from Vanderbilt University in 1971, and his juris doctor degree from Yale Law School in 1974. He is a member of the bar of the United States Supreme Court and the Fifth and Eleventh Circuit Courts of Appeals. Mr. Sefton was selected as Trustee of the Year by each of the Florida Association of Homes and Services for the Aging and the American Association of Homes and Services for the Aging. He currently serves as chairman of the board of directors of Cathedral Gerontology Center, a 120 bed skilled nursing facility, located in downtown Jacksonville, Florida. 41

43 Financing Team Experience Maura E. Davalos Vice President AMS Health Care Mortgage Corporation  Ms. Davalos joined AMS in July 2008. Ms. Davalos assembles the Pre- Application and FHA Application and monitors the information flow with the various divisions of HUD. Ms. Davalos joined Banc of America Securities in Healthcare Finance Department in 2000 and has assisted in the development of the Healthcare Finance Department of Banc of America Securities. In 2004 Maura joined UBS Investment Bank, and assisted Mr. Spiak, where he established an FHA Hospital Mortgage funding program. Ms. Davalos has worked on a substantial number of healthcare engagements including MUHA, Mennonite General, and Capital Health System. Specializing in the preparation of all phases of the FHA hospital mortgage insurance application process, Ms Davalos has completed FHA 242 screenings, Pre-Applications, Applications, organized HUD site visits and maintained day-to day contact and working relationships with HUD OIHCF staff. Ms. Davalos is continuing her formal education at Florida State University at Jacksonville. 42


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