Fred Hutchinson Cancer Center
Application Acceptance: April 14, 2022 Please note all information provided below is as of the date of the application submission with the exception of Loan Size & Closing Date.
Obligor: FHCC is a newly formed entity that combines the cancer research enterprise of Fred Hutchinson Cancer Research Center, and the cancer treatment clinical operations of Seattle Cancer Care Alliance. The merger creates an integrated cancer care and research entity, with FHCC to serve as UW Medicine’s cancer program and to operate as a clinically integrated part of UW Medicine. FHCC will offer a variety of treatment options for malignant and nonmalignant oncology diseases to both adult and pediatric patients in addition to conducting research for the purpose of eliminating cancer as a cause of human suffering and death, investigating into the nature and causes of cancer and related public health problems, investigating methods of prevention and treatment of cancer and related diseases, among other purposes.
Loan Size: $283,545,000
Description of Loan: Proceeds of the bonds will be used to refinance the FHCC Series 2022A Taxable Bonds. The Series 2022A Taxable Bonds were used to advance refund and defease the WHCFA Revenue Bonds, Series 2015 (Fred Hutchinson Cancer Research Center), currently refund the WHCFA Variable Rate Revenue Bonds, Series 2017B (Fred Hutchinson Cancer Research Center), and payment of issuance costs.
Proceeds will also be used to refinance part of the FHCC Series 2022B Taxable Bonds. The Series 2022B Taxable Bonds were used to (i) advance refund and defease the WHCFA Fixed Rate Revenue Bonds, Series 2017A (Fred Hutchinson Cancer Research Center) and the WHCFA Variable Rate Revenue Bonds, Series 2017C, (ii) fund the purchase of Seattle Children’s Hospital’s membership interest of the Seattle Cancer Care Alliance, and (iii) pay certain costs of issuance.
The portion of the FHCC Series 2022B Taxable Bonds relating to the purchase of the Seattle Children’s membership interest will be refunded on a corporate taxable basis.
Interest Cost Savings: Over the life of the bonds, savings generated from using tax-exempt debt over taxable on a net present value basis, would be estimated at $23.0 million in aggregate, or an average of $919,389 annually. This analysis compares taxable and tax-exempt fixed-rate matched maturity refundings of the Series 2015 Bonds and the Series 2017ABC Bonds, though the final structure of the bonds is subject to change.
Substantially all of the savings realized by FHCC from the availability of financing through tax-exempt bonds will be used in a manner that will minimize financing costs within the entity’s permanent capital structure and thereby the costs to the public of vital cancer treatments and contribute to the organization’s research mission of eradicating cancer.
Underwriters: Banc of America Public Capital Corp & DNT Asset Trust
Closing Date: June 30, 2022