St. Louis-based Ascension Health said it will invest $100 million to help shore up the financially troubled Boston-based provider Caritas Christi Health Care.
The financing will come in the form of a five-year, low-interest bond that 77-hospital Ascension will purchase during a forthcoming Caritas Christi bond offering, according to a joint statement released by the two.
The deal comes more than a year after Ascension backed out of a tentative agreement to acquire six-hospital Caritas Christi after it was revealed that Caritas Christi had a dwindling patient base and substantial debt, according to news reports. Earlier this year, however, Caritas officials announced a restructuring plan aimed at bringing the system out of debt. Funds raised through the bond offering will be used to finance the plan.
Under the deal, Ascension will purchase a substantial portion of the bond through a private-placement arrangement that will allow Caritas to access capital at a below-market interest rate, according to system officials. Ascension Healths financial commitment ensures that critical capital projects, including strengthening our information technology infrastructure and upgrading our emergency departments, will be placed on a fast track, said Caritas Christi President and Chief Executive Officer Ralph de la Torre in a written statement. -- by Shawn Rhea