By Kim West
Shelved capital improvement projects received new life as the Athens-Limestone Hospital board of directors approved a $10 million bank loan and a guaranty agreement with affiliate Huntsville Hospital.
The 10-year loan through PNC Bank is replacing a $7.1 million bond for ALH, according to Huntsville Hospital’s chief finance officer Lonnie Younger and cash debt manager Tina Maples.
The loan interest is fixed at 1.92 percent with no renewals while the bond interest rate is 6.1 percent. Maples said the loan is expected to close by May 1.
“This is going to save (ALH) approximately $900,000 and provide debt-service savings,” Younger said after the meeting.
Athens CFO Randy Comer said the change in financing fulfills two needs for the hospital.
“It will help with our cash (flow), and it allows us to borrow up to $10 million,” Comer said. “We used a (request for proposal) process — it was very successful and we had bids from various local firms.”
Outgoing Athens CEO Kelli Powers, who is replacing the retiring Younger as Huntsville’s finance chief on July 1, said the additional funds will allow ALH to move forward with capital projects discussed by hospital officials for the past 25 years.
Powers did not elaborate on the specific future projects but ALH is in the midst of a widespread capital campaign, opening a new sleep lab and observation wing, erecting a new medical building and revamping patient rooms and entryways.