| Mortgage | $755,874,500 |
| Cash Contribution | $124,506,178 |
| Total Project | $880,380,678 |
$755,874,500
FHA / GNMA Insured Mortgage Loan
AMS served as mortgage banker to Capital Health System (CHS). Located in Hopewell, NJ, CHS is a two-hospital system with both of its primary acute care hospitals located in urban neighborhoods. CHS had limited ability to expand or replace either of its two hospital campuses. CHS identified three potential Greenfield sites suitable to build a replacement hospital for its Mercer campus. The proposed project with an estimated cost of approximately $650 million would include a new 230-bed acute hospital, medical office building and central energy plant. This coupled with the approximately $200 million of refinancing resulted in a total project requirement of approximately $880 million. Once CHS obtained its mortgage insurance commitment in December 2008, a funding source became the next key decision point—taxable or tax-exempt? Reinvestment rates were at an all-time low, resulting in over $50 million of expected negative arbitrage. The capital markets had collapsed. It was decided by the project team that the best use of the mortgage insurance commitment would be through a taxable GNMA funding. The GNMA option eliminated the negative arbitrage on the construction portion of the loan, did not require a Debt Service Reserve Fund, bond ratings, an Official Statement, or an issuing authority.
