CARTI announced last week it closed and funded more than $51 million in refunding bonds for its flagship campus, the CARTI Cancer Center in Little Rock.
The refinancing is expected to save the statewide cancer treatment provider $3.3 million in interest expense over the next 22 years, and establishes a springboard to be able to finance future projects across the state.
Crews & Associates served as the sole underwriter and the Arkansas Development Finance Authority was the conduit bond issuer.
“This is a new day for CARTI,” said Adam Head, CARTI president and CEO. “The bond refinancing allows us to be more nimble in future expansion opportunities, allowing us to identify new underserved communities across the region who would benefit from our leading edge cancer care. This demonstrates the significant progress we’ve made over the last three years to transform our organization’s finances and hit our operational targets.”
When the CARTI Cancer Center in Little Rock opened in 2015, it was the organization’s only comprehensive cancer center. At the time, the organization had 12 treatment locations in the state. Since then, the organization has opened three additional cancer centers in Conway (2018), Russellville (2019) and North Little Rock (2020), and is currently under construction on two new cancer centers in El Dorado (2021) and Pine Bluff (2022).
Additionally, the organization has opened seven new treatment locations and specialty clinics in areas with limited cancer services, including Clarksville, Crossett, Magnolia, North Little Rock, Pine Bluff and Warren, bringing its statewide footprint to 19 locations in 16 communities.
Current federal tax law prevented the original bonds from being refinanced with low interest rate, tax-exempt bonds until 2023.
Crews utilized an innovative “Cinderella” bond structure not frequently seen in the public markets to allow the transaction to close sooner. Taxable bonds were issued now that will convert to tax-free in 2023. Additionally, the issuer was changed from the original county issuer to the state in order to allow for future financing of growth state-wide.
“We are incredibly proud of how well Arkansas investors supported CARTI by buying these bonds and allowing us to implement a financing vehicle that will help sustain their growth and success in treating cancer patients across the state,” said Edmond Hurst, Crews senior managing director.