By the Journal of Commerce

Alaska Industrial Development and Export Authority board approved $35 million in new conduit revenue bonds for the Greater Fairbanks Community Hospital Foundation.

This is the second increment of revenue bonds the authority has approved for the Fairbanks hospital. It follows AIDEA's earlier approval of $61.5 million in conduit revenue bonds for the hospital foundation.

Both sets of bonds are being used to refinance a 2004 bond issue for the hospital, although some proceeds from the latest financing will be used to fund construction and equipping of the Fairbanks hospital's new Harry and Sally Porter Heart Center, said AIDEA Executive Director Ted Leonard.

The new heart center will serve as the centerpiece of the hospital's newly developed cardiology program and will employ 21 people.

Like previous AIDEA bonds issued for the Fairbanks hospital foundation, the latest are conduit revenue bonds, which will be tax-exempt. Neither AIDEA's credit nor the state's is at risk in connection with these bonds, said Ken Vassar, a bond attorney with the firm of Birch Horon Bittner & Cherot. The hospital foundation has the financial responsibility for repayment, Vassar said. Vassar advises AIDEA's board on bond financings.

AIDEA board chairman Pat Galvin, who is also state commissioner of revenue, asked Vassar if the bond issue would impinge on the state's annual limit for issuing non-governmental tax-exempt bonds. Vassar said that since Fairbanks hospital is a nonprofit 501 (c)3 corporation, its tax-exempt bonds do not fall under the ceiling, which is imposed by the Internal Revenue Service on states.

Alaska's limit is currently about $235 million, Vassar said.

The foundation will issue the new bonds in two groups, one at a fixed interest rate and a second at variable rates.