MBIA’s bond insurance on Miami Children’s Hospital’s Series 2007 Bonds, which refunded approximately $134 million of a 2001 bond issuance and provided $120 million of new proceeds, will allow the hospital to lower its existing cost of capital and proceed with planned expansion. Established in 1950 as a pediatric specialty hospital, Miami Children's Hospital (MCH) is recognized as the leading area facility of its kind offering the only freestanding pediatric trauma center in Miami-Dade County and the State of Florida. It is currently operating at capacity and in late 2006 reached out to the capital markets to ease overcrowding and expand its neonatal intensive care unit.

As the only licensed children’s hospital in South Florida located approximately 12 miles south of downtown Miami, MCH offers a comprehensive range of specialty and subspecialty pediatric services with the largest children’s Cancer Center in the state. With 252 staffed beds, MCH is also a pediatric teaching affiliate of several area universities. It has one of the largest and most recognized pediatric residency training programs in the southeastern U.S. with approximately 90 pediatric and sub-specialty residents in training annually, and 210 rotating residents.

Growth in its service area and admissions have resulted in Miami Children’s currently operating at capacity with the neonatal and pediatric intensive care units operating at 114% of capacity. These growing clinical demands have forced a number of support administrative offices off campus and current parking is expected to be insufficient to meet future growth. Consequently, most of the components of its Capital Improvement Program are designed to relieve overcrowding and bottlenecks in providing care.

For this necessary financing, MCH wanted a bond insurer that could handle both the refinancing and the new issue and MBIA was able to provide that service. In addition, MBIA was able to structure the transaction so that MCH could reach their goal without overextending their current budget. The refunding provides savings to the hospital by converting the bonds from fixed to auction rate bonds (swapped to fixed). The new money bonds are structured to wrap around the refunding bonds in order to take advantage of the flat yield curve. This structure increases annual debt service payments only modestly despite a sizable increase in debt for the Hospital.

MCH benefits from rising demand, limited competition, and strong private and public support, as well as a proven history of sound financial performance. As a result, MBIA is providing an insurance commitment to MCH which will allow the hospital to proceed with expansion that will enable it to properly service its growing admissions. While the hospital had experienced a period of financial decline in the late nineties, it maintained strong liquidity throughout while growing market share. This financing is expected to cover the cost of MCH’s Capital Improvement Plan. All improvements will be made within the hospital’s existing footprint and have received required community and governmental approvals.

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