CHICAGO — After wrapping up more than $400 million of bond issues for several not-for-profit healthcare borrowers and Marquette University, the Wisconsin Health and Educational Facilities Authority's longtime leader, Lawrence Nines, plans to retire.
Nines will retire at the end of the month, handing over the reins as executive director of the agency to his longtime deputy Dennis Reilly, who joined the authority 15 years ago.
"We've had a succession plan in place so it's no surprise to our borrowers," said Nines, who led the authority for the last 29 of its 33 years.
Nines left the private sector, where he worked as an assistant treasurer for Allis-Chalmers Credit Corp., to manage the authority. He stuck around, enjoying the work on behalf of non-for-profits that "was different from the corporate world where I had come from," he said.
After facilitating hundreds of transactions, Nines said his advice to organizations is to keep in mind "when you are borrowing, it's the next financing that is the most important one. You have to keep your financing options open for the next project. No one will remember that you paid a quarter percent less now but they will remember if you have difficulty financing your next project."
Nines, 64, said many borrowers struggle because of terms or risky structures agreed to for interest rate savings. Strong attention to credit quality also never hurt a borrower, he added.
Nines also noted the change in how business is conducted with fewer personal meetings in favor of conference calls which may be more efficient for a financing team but make it more difficult to educate borrowers.
During Nines' tenure, the agency grew from two employees to four and its powers were expanded. Initially it served only non-profit healthcare borrowers; private colleges and universities were added in the 1980s and later private kindergarten through 12th grade schools and community providers.
The authority won legislative authority last year for cross-border financings, but a push to serve not-for-profit museums and cultural institutions failed.
Nines is a Wisconsin native, who was born in Beloit and attended the University of Wisconsin-Madison. He lives in Waukesha and intends to keep busy in retirement through volunteer work and meeting the demands of his seven grandchildren.
Nines' retirement comes as the agency's business has picked up in recent months with a growing number of borrowers seeking to capitalize on record low interest rates to raise new money for projects and refinance debt.
The agency this week sold $85 million of revenue bonds on behalf of Marquette. The deal was underwritten by Barclays Capital and Robert W. Baird & Co. Inc. The sale included a mix of new-money and refunding bonds.
Ahead of the sale, Moody's Investors Service affirmed Marquette's A2 rating and stable outlook on $242 million of debt. The rating is supported by the school's "established market position as a large, urban, comprehensive, Jesuit university located in downtown Milwaukee with growing enrollment and net tuition revenue," according to Moody's.
The school has an enrollment of more than 10,000.
Its challenges include operating in a highly competitive market that includes the University of Wisconsin system and regional private and public universities, modest balance sheet resources, and a high reliance on student charges for 72% of its total operating revenues.
The agency on Wednesday was scheduled to price $165 million of revenue bonds on behalf of Froedtert Health. Morgan Stanley and B.C. Ziegler & Co. are underwriting the sale, which includes about $120 million of new-money with the remaining refunding debt for savings.
Froedtert is planning a $117 million addition to its Wauwatosa campus for a heart and vascular center and transplant center. Ahead of the sale, Fitch Ratings and Standard & Poor's both affirmed AA-minus ratings and stable outlooks for the system.
"The 'AA-minus' rating reflects our view of Froedtert's continued solid operating performance, solid balance sheet metrics, and strong business position," said Standard & Poor's analyst Kevin Holloran.
Fitch said the rating was supported by Froedtert's strong balance sheet with 286 day cash on hand and unrestricted cash and investments of $974 million, and a leading market share of 37% in its primary service area northwest of Milwaukee. The system also benefits from an excellent clinical reputation and affiliation with the Medical College of Wisconsin.
Fitch's credit concerns include competition from nearby facilities. Froedtert operates three hospitals with 772 staffed beds and had total operating revenues of $1.45 billion in fiscal 2012.
Springfield, Ill.-based Hospital Sisters Service Inc. recently refunded about $180 million of debt issued for its Wisconsin facilities. Bank of America Merrill Lynch was senior manager and BMO Capital Markets and JPMorgan were also on the transaction. Ponder & Co. is advisor and Jones Day is bond counsel. HSSI carries ratings of A1 from Moody's and AA-minus from both Fitch and Standard & Poor's.
WHEFA recently released its review of transactions completed in the last fiscal year ending June 30. The agency reported deals totaling $1.6 billion for 19 borrowers. Organizations achieved more than $141 million in savings through their refinancing of existing debt.
"This year-in-review report shows that WHEFA effectively and efficiently assisted a variety of Wisconsin institutions," Gov. Scott Walker said in a statement.
