Tuomey inks forbearance agreement with hospital revenue bond insurers

By Caroline Salls

Pittsburgh, March 17 – Tuomey Healthcare System entered into a forbearance agreement with bond insurers CIFG Assurance North America, Inc. and Ambac Assurance Corp. in connection with defaults on its South Carolina Jobs – Economic Development Authority hospital revenue bonds, according to a news release.

The effective date of the forbearance agreement is March 3. The six-month forbearance period expires on Sept. 2.

Events that could cause early termination of the forbearance period include Tuomey’s pursuit of a bond-related claim against the insurers, its failure to cure any new default that may occur during the forbearance period, its failure to perform its obligations under the bond agreements and the bond trustees’ pursuit of a claim against Tuomey.

According to the release, Tuomey has agreed to make deposits into the bond principal and interest accounts held to pre-fund on a monthly basis the annual debt service due on the company’s series 1998 and series 2006 bonds.

The company said these monthly pre-funding deposits include a lump sum amount for the months of November 2014 through February 2015 due upon execution of the forbearance agreement, and monthly deposits during the forbearance period.

Tuomey issued $74.51 million of the series 2006 bonds and $25 million of the series 1998 bonds.

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