At its meeting Wednesday, the Iowa Board of Regents approved a resolution authorizing the issuance of $252.6 million in Hospital Revenue Bonds Series 2025A to fund key infrastructure and development projects for University of Iowa Health Care. The bond sale was finalized on the morning of Jan. 15, and the board’s municipal advisor, Elizabeth Bergman […]
At its meeting Wednesday, the Iowa Board of Regents approved a resolution authorizing the issuance of
$252.6 million in Hospital Revenue Bonds Series 2025A to fund key infrastructure and development projects for University of Iowa Health Care.
The bond sale was finalized on the morning of Jan. 15, and the board’s municipal advisor, Elizabeth Bergman of Baker Tilly, delivered the update that afternoon: despite a tumultuous year in the municipal bond market, UI Health Care was able to capitalize on favorable conditions to secure highly competitive financing.
“Well, 2025 has been an interesting year in the municipal bond market,” Ms. Bergman said. “We've had a tremendous amount of volatility with the rates going up and rates going down. Overall, we are pretty lucky that today we entered the market on a good day and had some very good results.”
The winning bid, submitted by Bank of America, offered a true interest cost (TIC) of 4.26%, an improvement over the 4.5% anticipated in November. Seven bids were received in total, “which is around what we expect from the University of Iowa Hospital, and also a number that allows you to get a very good view on the market,” Ms. Bergman said, adding that the spread between the highest and lowest bids was just 14 basis points, with Wells Fargo submitting a cover bid at 4.28%.
The bond issuance attracted substantial attention, with 570 unique views of the official statements distributed to prospective buyers, underwriters, and stakeholders.
Funding future growth
The approval builds on a reimbursement resolution adopted by the board in November 2024, which aligns with federal Internal Revenue Code regulations. This framework enables UI Health Care to maximize its ability to recoup costs for qualifying projects using bond proceeds.
The $252.6 million raised will fund a range of infrastructure and modernization efforts at UI Hospitals & Clinics, including the expansion of the maternity unit, emergency department, and the NICU at Stead Family Children’s Hospital.
Strong credit ratings
UI Health Care’s financial stability strengthened its market position during the sale, Ms. Bergman reported. The hospital’s credit ratings were reaffirmed at Aa2 by Moody’s and AA by S&P, both with stable outlooks. Rating agencies praised the hospital’s strong market position, solid financial margins, and liquidity while noting its ambitious capital plans as an area for future consideration.
“Overall, very good results,” Ms. Bergman said.