Executives of St. Luke's Health System are planning to borrow money sometime this summer for undetermined future use. They say the debt will put more cash into the system's pockets.
"Right now is a great time to borrow because interest rates are at historical lows, and the demand for A-rated credit from investors is extremely high," spokesman Ken Dey said. "It will add some cash to our balance sheet, helps assure we have a base of capital for future needs, and it does it at a low rate. I guess you could say it's opportunistic borrowing."
Dey declined to say how much the system wants to borrow, since managers have not yet sought board approval.
The credit-rating agency Moody's Investors Service said St. Luke's has debt totaling $658 million and makes about $1.5 billion a year. The system includes several hospitals and clinics across Southwest Idaho and in the Treasure Valley into eastern Oregon.
Moody's gave St. Luke's a stable outlook last week, citing its large size and strong financial history. But it warned that St. Luke's has borrowed a lot of money compared with its cash flow, and that more debt could affect its credit strength.
About two years ago, the system borrowed $150 million through the municipal-bond market. Here's how that money is being spent, according to the health system:
$49 million for land in Nampa and construction of an urgent care center.
$22 million for medical imaging equipment.
$18 million to build a new medical plaza in Fruitland.
$14 million for the Epic electronic medical record system.
$9 million to build a surgery center in Meridian.
$5 million for a nursing call system.
$3 million to buy land for a planned expansion of St. Luke's in Downtown Boise.
$16 million for remodeling, furniture and equipment replacement.
$14 million slated for use in the Fruitland medical plaza.
The future borrowing won't be used for the system's current capital plan, which is already budgeted, Dey said.
Audrey Dutton: 377-6448, Twitter: @IDS_Audrey