Trinity Health in talks to sell New Jersey assets to Virtua Health 3 months after failed merger

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Carbondale, Pa.-based Maxis Health reportedly entered into a nonbinding agreement March 8 to sell Lourdes Health System, a two-hospital system in Camden, N.J., to Virtua Health.

Under the letter of intent agreement, Marlton, N.J.-based Virtua Health will purchase Lourdes Health System’s two hospitals from Maxis Health, an entity of Livonia, Mich.-based Trinity Health.

“The parties hope that they will be able to complete this transaction, which has the potential to achieve great benefits for healthcare in South Jersey. Further review is underway; there is no final agreement,” Lourdes Health System officials said in a news release. “Because we are very early in the due diligence process, the parties have no other information to provide at this time.”

The decision comes roughly three months after Camden-based Cooper University Health Care axed its plans to acquire Lourdes Health System and Trenton, N.J.-based St. Francis Medical Center.


Trinity Health races to sell $889M in bonds ahead of tax changes

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The possibility that Congress could eliminate federal tax breaks for a large portion of the municipal market has hospitals and other debt issuers hurrying to issue tax-free bonds before borrowing costs rise, according to Reuters.

Nonprofit hospitals and health systems issue tax-exempt bonds to finance capital projects. Under House Republicans’ tax plan, interest on newly issued private activity bonds would no longer be tax-exempt. This change would reduce financing options for some healthcare organizations by raising the cost of capital, according to S&P Global Ratings.

“From a credit perspective, higher borrowing rates can lead to budget imbalances, a challenge for all, and a hallmark of struggling credits,” said S&P.

In response to the tax bill passed by the House in November, Livonia, Mich.-based Trinity Health moved up the sale of about $889 million of new and refunding revenue bonds to this week from January 2018.

“I look at it as kind of a risk mitigation. We were able to accelerate and mitigate any risk of where these proposals may eventually land,” Dina Richard, senior vice president of treasury and chief investment officer of Trinity Health, told Reuters.

The move to eliminate tax exemptions for new private activity bonds is not included in a bill passed by Senate Republicans on Saturday, according to Reuters.