University of Iowa seeks approval for $252.7 million hospital revenue bond sale

The University of Iowa is requesting approval from the Iowa Board of Regents for a resolution that would authorize the “sale, award and issuance” of approximately $252.7 million in hospital revenue bonds to finance projects for its Hospitals & Clinics facilities.

Titled “Hospital Revenue Bonds Series 2025A,” the bond sale is in alignment with a resolution the board passed in November 2024 that would allow maximum possible reimbursement for several major projects it approved for the university between 2021 and 2024.

Projects

According to documents in the board’s agenda, the proceeds from the Series 2025A Bonds may be allocated to fund a portion of the following projects, as well as any other projects deemed eligible:

• Maternity Unit Expansion: The expansion of existing maternal health services within the university campus will add 30,000 square feet to the maternal care areas, along with 23 new beds, on-call rooms for faculty, and expanded workspace for staff.
• NICU Expansion: The expansion of the Neonatal Intensive Care Unit (NICU) at University of Iowa Stead Family Children’s Hospital will involve building out the entirety of the hospital’s seventh floor and creating 28 NICU rooms that will closely mirror the existing sixth-floor NICU.
• UIHC – Emergency Department Expansion: The emergency department is expanding with a two-level addition on the south side and renovations to part of the existing department.
• Emergency Generator Facility: The relocation of UIHC’s emergency power facilities will involve constructing a 10,000-square-foot building addition on the north side of the existing emergency power generator facility to accommodate up to three emergency generators, as well as upgrading fuel oil storage and installing two emergency generators to serve the Roy Carver Pavilion and Pomerantz Family Pavilion.
• New North Liberty Hospital Campus: The 469,000-square-foot health care facility at Forevergreen Road is nearly completed. The facility includes medical, clinical, educational and research offices, along with a central utility plant dedicated to its operations.

Bonds to be repaid over next 25 years

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The bonds will be repaid over the next 25 years using revenue generated from the University of Iowa Hospitals and Clinics’ operations. The funds raised will cover essential project costs, underwriter fees, and other issuance-related expenses, according to documents in the board’s agenda.

“Hospital income includes the gross income and funds received by the hospital system, including the proceeds of rates, fees, charges and payments for health care provider activities for patient care services after deduction of current expenses,” the agenda stated, adding that the income does not include state appropriations to the university.

The Series 2025A Bonds would offer interest payments free from both federal and state taxes for Iowa residents and are structured with a 15.7-year average maturity. Bonds maturing after 2035 would be eligible for early redemption beginning in 2034 and denominations will be set at $5,000, board documents state.

Bids will be received and opened at 10 a.m. Jan. 15, and results of the bid opening and a recommendation for award will be presented to the board later that day.