Jill Schramm/MDN Trinity Hospital, shown Tuesday, would be replaced with a new medical complex, which Trinity proposed to fund through bonding.

Trinity Health is seeking up to $430 million in bond financing, of which most would go toward construction of a new medical complex.

Trinity officials presented initial plans to the Ward County Commission Tuesday. Because Trinity is a nonprofit, it must go through a governmental entity to incur debt through the sale of bonds. Trinity has worked with the county previously on several bonds.

Some of the proposed bonding would actually be refunding of about $50 million in debt remaining from 2006. The new bonding, expected to be about $370 million, would help pay for $275 million in construction, along with equipment and other expenses associated with a new hospital, medical office building and mental health facility in southwest Minot. Official ground-breaking will occur next spring, but some site work is planned this fall.

The county commission set a public hearing on the bonding request for Dec. 20. As a pass-through agency, the county would not have any liability for payment.

Trinity plans to go to the bond market in February, said Dennis Empey, chief financial officer. The hospital’s bond rating of BBB- indicates the organization has capacity to meet its financial obligations, although an adverse economic change could weaken that capacity. Standard and Poor’s uses an A, B and C letter system, with triple or double letters indicating greater financial strength. A plus or minus can be used to indicate relative standing within the categories.

Standard and Poor’s also provides an outlook rating, indicating the likelihood of an issuer’s bond rating rising or falling. Trinity was able to pay off the remainder of a 1996 bond and take other actions to improve its standing recently from negative to stable. It means the medical center’s BBB- rating no longer is considered at risk of slipping.

“In healthcare, that’s not very common – where you actually get upgraded. So we were pleased,” said Randy Schwan, a Trinity vice president. “That should help us in our endeavor.”

Schwan said Trinity already has invested millions of dollars from operational income, and operational income is expected to be a continued source of funding for the project. Trinity also is considering how much it might want to raise in a capital campaign, should it decide to conduct a one, he said.

Trinity is assessing its equipment to determine which items will be moved to a new facility and what type of purchases will be needed, Schwan said.

“We are working with vendors, departments and equipment consultants to make sure we have the right blend,” he said. “Looking over the next five years, we are trying to ensure that any equipment replacement or lease terminations are decided with the move in mind.”