MegaProject 1356: EllisDon to issue bonds to finance US$320 million hospital P3 in British Columbia
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EllisDon Capital Inc. is preparing to issue two amortizing senior secured bonds to finance the CAD417 million (US$319.5 million) Royal Inland Hospital Expansion Project. Totaling approximately CAD154.9 million (US$118.7 million), the bonds have been assigned a first-time A3 rating by Moody's Investors Service.
The project involves the design, construction, financing and maintenance of a new Patient Care Tower at the Royal Inland Hospital in Kamloops, British Columbia, located in south-west Canada. It was awarded to EllisDon by the Interior Health Authority in September.
The nine-storey tower is expected to include three floors of inpatient beds dedicated to mental health and medical/surgical units; a new surgical suite; a perinatal centre and private labour and delivery rooms, obstetrics and postpartum beds; and a neonatal intensive care unit.
The project will also entail significant renovations to the existing emergency department, pediatrics, post-anaesthetic recovery unit and morgue of the hospital. The Target Service Commencement Date of the tower is 15 February 2022, while the renovations are planned to be completed in 2024.
As well as equity sponsor, affiliates of EllisDon Inc. are also participating in the project as construction contractor and service provider. The latter will assume maintenance and rehabilitation obligations for a 30-year period.
EllisDon has been successful in winning similar hospital PPP projects across Canada, and demonstrated a preference for capital market financing to raise the necessary funds for their development. Earlier this year, the company issued two amortizing senior secured bonds totaling approximately CAD219.1 million (US$167.9 million) to finance the redevelopment of West Park Healthcare Centre in Toronto, achieving financial close of the P3 project in August.
In February, the company was also awarded and achieved financial close of the CAD411 million (US$314.9 million) Michael Garron Hospital P3 project, which involves the construction of a new eight-story patient care tower and is also located in Toronto.