The New York Blood Center declared an urgent
On Wednesday its parent, New York Blood Center Enterprises, plans to price $46 million of tax-exempt municipal bonds to renovate its newly leased campus in Rye, New York.
The bonds, which will be issued through the Westchester County Local Development Corporation, will create a centralized base for the nonprofit's blood and laboratory operations. The facility will help process and store blood for distribution to hospitals in the tri-state area, according to Blood Center CFO David Bench, hopefully alleviating shortages like the current one. The pricing schedule is tentative, according to an online investor presentation.
The deal received a Baa1 rating from Moody's Investors Service.
The revenue bonds are the first issuance in over 25 years from the New York Blood Center enterprises, which provides blood for nearly 400 hospitals and 700 research organizations. JP Morgan is sole-managing the deal. Harris Beach, PLLC is bond counsel.
The NYBC has operations in the tri-state New York area, the Mid-Atlantic and Midwest. The new facility, which will be 187,000 square feet and cost $108 million, will consolidate operations for the tri-state area and the center's research and serve as the headquarters for New York Blood Center enterprises.
The NYBCe first met with the Westchester LDC to discuss the new facility in 2022, according to the LDC's chair, Joan McDonald. The property had housed operations for the Avon cosmetics company, but had been vacant since Avon
"The county was not happy that Avon left, but we were happy that the Blood Center was coming," McDonald said.
McDonald told the NYBCe that the Westchester LDC often issues bonds on behalf of nonprofits, and last year, the Blood Center approached the LDC to discuss an issuance.
"When a non-profit comes to us seeking financing, we do a very rigorous benefit-cost analysis to see what the potential is for the county," McDonald said. "And we thought this was a good prospect, a good company for providing funding to."
The
"Working with the Westchester County Local Development Corporation was a very collaborative experience, and they were extremely supportive," Bench said in an email.
NYBCe broke ground on the campus in June of 2023. The construction is expected to end late this year, according to a press release.
In Moody's ratings report for the deal, analysts noted NYBCe's "large-scope and long-term established operations," as well as its "sizeable and largely unrestricted" total cash and investments of $420 million.
"Management's track record of executing on its strategic plans and its ability to pivot to meet changing conditions is a key rating driver under Moody's ESG methodology," the report said.
But the report also noted an expected thinning in the historically modest operating performance over the next few years that will limit financial flexibility.
"When compared to the size of operations, spendable cash and investments is modest and coverage will likely decline through fiscal 2025," analysts wrote.
Bench said the Blood Center is "currently in the middle of an investment period for the enterprise," which the nonprofit expects to continue for the next couple years.
In the deal's roadshow presentation, NYBCe reported $541 million in revenue for 2022 and $546 million in expenses. The nonprofit had $766 million in assets in December 2022.
The Blood Center also owns a
"The Center East Life Sciences project will likely involve a developer and any decisions regarding financing alternatives have not been disclosed," Bench said.
