From two humble canvas tents in the Southern California desert more than 100 years ago, City of Hope has grown into an independent biomedical research institute and the highest ranked cancer hospital in the West, according to U.S. News & World Report’s Best Hospitals: Specialty Ranking. Now, spurred by a desire to turn hope into reality for as many patients as possible, the organization has embarked on an ambitious growth plan, funded with the help of J.P. Morgan.
As part of its financing roadmap, City of Hope recently completed a well-received $335 million tax-exempt bond offering. Proceeds from the issue are earmarked for expanding the flagship campus in Duarte, California, including, a new state-of-the art outpatient clinic and the expansion of onsite lodging for patients and their families. The bond offering is part of a $1.5 billion financing plan that also includes the use of cash and investments, philanthropy and revenue from operations. This capital plan includes additional growth of its main campus, development of a new comprehensive cancer campus in Orange County and continuing to open new sites within its clinical network. The plan will also help City of Hope increase its clinical and scientific impact by supporting initiatives in precision medicine, translational research and the latest immunotherapies like CAR T-cell therapy.
We are delivering on our mission and our strategy, disrupting the way life-threatening diseases are fought, treated and cured. We are pleased to be working with J.P. Morgan to support our vision to bring tomorrow’s discoveries to the people who need them today.
The City of Hope story began in 1913, when a group of volunteers, motivated by compassion to help those afflicted with tuberculosis, raised money to start a free, nonsectarian tuberculosis sanatorium.
Since then, City of Hope has grown and evolved with advances in medicine and has a grand vision for fighting cancer, diabetes and other life-threatening diseases. Now one of only 51 comprehensive cancer centers in the U.S., the highest designation awarded by the National Cancer Institute, the organization is advancing research and treatment, using innovative approaches to a cure that include gene therapy, cell therapy, bone marrow and stem cell transplants and robotic surgery.
Located just 20 miles northeast of Los Angeles, City of Hope is a cornerstone of the community, employing more than 6,000 employees across 30 clinical network locations. The organization serves as a destination cancer treatment center, providing access to world-class health care for more than 18 million people who live in its primary service area. In 2018, City of Hope had 730 clinical research studies and clinical trials open to its patients, with over 30 percent of new patients in 2018 associated with a clinical trial.
The $335 million issue is the fourth bond issue that J.P. Morgan has led as senior manager for City of Hope since 2012. The latest issue provides much needed supply to the California municipal bond market, which has seen a relatively modest amount of issuance this year. The 30-year bonds were priced to yield 4.05% (if not called and held to maturity), and are tax-advantaged for many California-based investors.
“This is a key part of our financing plan, one that will enable us to grow and pursue our goals of leading-edge cancer research and compassionate care,” said Jennifer Parkhurst, City of Hope chief financial officer.
“We were able to price this issue at very competitive rates and it attracted strong demand from natural buyers, such as California-based mutual funds and pension funds,” said Peter Reilly, managing director within J.P. Morgan’s healthcare public finance team. “This provides City of Hope with financial flexibility to maintain their reputation as one of the leading cancer research institutions in the country.”
J.P. Morgan’s public finance team is one of the top underwriters of municipal bonds assisting medical centers, educational institutions as well as state and local governments raise cost-effective financing. From 2017 to the present, J.P. Morgan is the leading public finance healthcare underwriter and the firm has raised more than $38B in bonds and credit financing for healthcare clients over the last 5 years.1.
Source: SDC, Bloomberg, J.P. Morgan
Header image source: City of Hope.