State sells bonds to pay off $183 million in MaineCare hospital debt

By Sun Journal,
Posted Sept. 03, 2013, at 1:37 p.m.

AUGUSTA, Maine — A bond meant to pay off $183.5 million in state debt for services provided by hospitals statewide under MaineCare, the state’s Medicaid system, was sold Tuesday, according to a release issued by Gov. Paul LePage.

The payment will trigger an additional $305 million in federal matching funds.

“With the sale of the liquor revenue bond, Maine hospitals are now just weeks away from being repaid the more than $484 million in welfare debt owed to them,”LePage said in a prepared statement. “This is good news for these employers and their local communities.”

The payment is being financed with revenue expected from the state’s wholesale liquor business, which the state is expected to award a new contract on later this fall.

According to the release “the $220 million liquor operation revenue bond received an “all-in rate,” or total interest cost, of just 3.79 percent.”

The additional $36.5 million in the bond sale is what the state will pay in interest and fees as well as a portion that’s set aside in a reserve at the Maine Municipal Bond Bank, according to Jennifer Smith, a spokeswoman for the Department of Adminstrative and Financial Services.

“High demand from investors helped drive the interest rate down,” said Mike Goodwin, executive director of the Maine Municipal Bond Bank. “The interest shown by investors and the positive ratings received from the rating agencies demonstrate the strength of the liquor business in Maine.”

The Maine Municipal Bond Bank is scheduled to settle the bond sale on September 5, 2013, the release stated.

Watch Bangordailynews.com for updates.

http://bangordailynews.com/2013/09/03/politics/state-sells-bonds-to-pay-off-183-million-in-mainecare-hospital-debt/ printed on October 2, 2014