Mayo Clinic is issuing $300 million of taxable bonds this month raise funds for "general corporate purposes."
A 200-page preliminary offering memorandum was filed March 3. The bonds are being offered in denominations of $1,000 "and integral multiples thereof…." Starting on Nov. 15, 2016, interest on the bonds is payable every May 15 and Nov. 15.
"Mayo will use the proceeds of these bonds for general corporate purposes," according to Mayo Clinic's Susan Barber Lindquist.
Mayo Clinic, which has AA ratings from Moody's and Standard & Poor's, regularly issues taxable bonds and tax-exempt bonds to fund projects. More bonds are scheduled to be issued this spring.
"In early May, Mayo also plans to issue $250 million of tax-exempt variable rate bonds, the proceeds of which will be used to refund $200 million of fixed rate bonds issued in 2006 through municipal authorities in Jacksonville, Florida; and Rochester; and for new projects in Rochester," wrote Barber Lindquist in an email statement.
She added that, "Mayo also plans to retire the $50 million of tax-exempt fixed rate bonds issued in 2006 through Maricopa County, Ariz. The 2006 bonds are subject to optional redemption on May 15, 2016."
Through refunding and retiring bonds, the end result should be that the "… Total net new debt of Mayo Clinic will not exceed $300 million," she wrote.
The March 3 bond memorandum included an independent audit of Mayo Clinic. That audit spotlighted many aspects of Mayo Clinic's operations.
• $281 million in revenue from "Retail pharmacy sales" in 2015. That is up $30 million from $251 million in 2014.
• $31 million in revenue from "Graduate Medical and Other Education." That is down $10 million from $41 million in 2014.
• $38 million from "Cafeteria Revenue" in both 2015 and 2014. It made $31.8 in 2011.
• $65 million in revenue from "Royalties." That an increase from $52 million in 2014.
• $41 million in revenue from "Retail stores" in 2015. That's sharp increase from the $20 million in retail store revenue reported in 2014.
• $14 million in revenue from "Oil- and gas-producing activities. That's a decrease from $24 million in 2014.
• $73 million of "Charity Care" was provided to patients in 2015. That is down from $76 million in 2014.
• Mayo Clinic reported $6 million in income taxes, "including interest and penalties for uncertain tax positions" for 2015. The filing added, "It is not anticipated that a significant change in the reserve will occur over the next 12 months."