WASHINGTON, D.C. – November 17, 2020 – Berkadia today announced the financing for Metro Pavia Hospital Group, a seven facility hospital system located across three regions in Puerto Rico. Managing Director Nick Nicholson of Berkadia’s Washington, D.C. office originated the $186.4 million loan for the borrower, San Juan-based Metro Pavia Hospital Group, LLC. The transaction closed on August 25.
The 25-year fixed rate HUD Section 242/223(f) insured loan refinanced floating rate bank debt from a syndicate of local banks. The HUD loan will generate immediate debt service savings, eliminate future interest rate risk, remove recourse and fund $33 million in new money for renovations, expansions and new co-generation systems for the seven facilities.
“This was a significant accomplishment for Metro Pavia,” said Nicholson. “To obtain federal mortgage insurance for a hospital system in Puerto Rico during a global pandemic is a testament to the strength of the Metro Pavia management team and their history of providing high quality care and strong financial results through hurricanes, recessions, political upheaval and earthquakes. This transaction also owes its success to the willingness of FHA/HUD to support Puerto Rican healthcare infrastructure at this critical time. This loan will solidify the balance sheet of Metro Pavia and reinforce the hospital facilities themselves via $33 million in upgrades including expanded emergency rooms, outpatient facilities and ICUs at the seven hospitals.”
The borrower, Metro Pavia Hospital Group, is comprised of seven acute care hospitals, four in San Juan, two in Arecibo and one in Mayaguez. These facilities provide critical acute medical care for thousands of Puerto Rican citizens in three of the most populous cities on the Island.