The Authority is the primary issuer of municipal bonds for New Jersey's health care organizations. Created in 1972 by an Act [pdf 1380k] of the Legislature to provide not-for-profit health care providers with access to low-cost capital, the Authority's statutory powers were expanded in 1998 to include financing for all health care organizations or components thereof. Since its inception, the Authority has issued over $16 billion in bonds on behalf of roughly 150 health care organizations throughout the state.
The Authority is governed by a seven - member board, three of whom are ex-officio:
- Commissioner of Health who serves as Chairman
- Commissioner of Human Services
- Commissioner of Banking and Insurance
Four public members are appointed by the Governor with the consent of the Senate and serve staggered four- year terms.
While the majority of its financings have been for acute care hospitals, the Authority has also provided capital for nursing homes, assisted living facilities, specialty hospitals, home health agencies, mobile intensive care units, outpatient centers, rehabilitation centers, homes for multi - handicapped individuals, and health maintenance organizations. Because of its expanded legislation, the Authority can now finance other types of health care organizations regardless of their tax status such as continuing care retirement communities, management service organizations, blood banks, hospices, day care facilities, and any organizations related thereto.
The Authority tailors its services to the needs of each borrower. Experienced staff is available from the conceptual stage through the development of the project all the way to the final principal payment for the bond issue. The Authority qualifies bankers and, together with the borrower, assembles a financing team, and can manage all aspects of the financing process, from investigating borrowing options, to negotiating legal terms and conditions, to marketing and closing the issue. After closing, Authority staff is available to answer questions regarding covenants and funding requirements as well as to facilitate corporate reorganizations, collateral substitutions, and asset transfers.
Authority staff monitors compliance with the covenants contained in the bond documents, works closely with the trustee banks, and after consultation with the borrower, tailors an investment strategy for trusteed funds to meet the individual requirements of the borrower. Authority staff also oversees project costs, construction schedules and change orders in order to provide a basis to review and approve payment requisitions.
The Authority acts as a liaison with other state and federal agencies and facilitates the flow of vital information among state health policy makers, investors, providers, as well as the rating agencies, bond insurance firms and letter of credit banks. Data bases maintained by the Authority provide management assistance and financial profiling which have proven to be useful tools for both planning and monitoring purposes.
The Authority can issue both federally tax - exempt and taxable bonds. The interest on all bonds issued by the Authority is exempt from New Jersey taxation.
BY-LAWS of the NJHCFFA [pdf 147k]