The Natrona County Board of Commissioners voted to approve the Wyoming Medical Center's plan to buy out a $27.6 million bond series during a public meeting Monday evening.

The hospital proposed the early bond redemption to the commissioners during a work session on Thursday.

But the commissioners weren't quick to approve the measure, first clarifying exactly how much the redemption would cost the hospital in fees and questioning the necessity of the move.

"There's not a lot of benefit in us keeping the bonds in the position they're in," said WMC Chief Financial Officer Nancy Brandt. "It did save us money in the beginning, but because bonds like ours are not trading right now, there's no benefit to us having the swap, the swap overlay or even the bonds."

The bonds were set to mature in September 2024, but will instead be redeemed prior to maturity on July 30 of this year. The hospital bought back all of its bonds from investors earlier this year after the bond market became particularly volatile, Brandt said.

"That's through no fault of the swaps and through no bad decisions on the swaps," she said. "That was a good decision at the time it was done, and no one could foresee what was going to happen to the bond market. We're very lucky that we're in a position to be able to redeem our bonds and get away from that volatility."

Redeeming the bonds early will clear the hospital of its variable interest rate bond debt, but will cost some money in fees to terminate swap and overlay agreements related to the bonds.

"We'll pay everything off, and there will be a slight expense to doing that because you pay a fee to exit the swap and swap overlay," Brandt said.

Due to approximately $500,000 saved through the bond swap agreement, Brant said, virtually no extra money will be spent to redeem the bonds because fees will come out of the saved amount.

"The net result will more than likely be next to zero," she said. "We'll have no debt on the books related to that Series 2005 Natrona County bonds."

Commissioner Barb Peryam wondered aloud why, after becoming the sole owner of its own bonds, the hospital would want to buy out the bonds.

"Why do you have to pay yourselves off?" Peryam asked. "Why can't you just allow that to stay and not have to spend the $500,000 or $600,000 we've saved?"

Brandt said that if the hospital didn't redeem the bonds, it would have to reissue them, which is more expensive than terminating the swap and overlay and redeeming the bonds early.

"It just doesn't make sense to continue to hold your own debt," Brandt said. "The best decision is to get out of the deal rather than absorb the cost of doing another agreement. Nobody is going to buy the bonds right now, so we may as well get out of it."

The hospital does still have about $4 million in fixed rate bonds, but those bonds are not subject to the volatility of the market and will not be redeemed early, Brandt said.

Contact reporter Megan Lee at (307) 266-0589 or megan.lee@trib.com

Lifeline of Series 2005 Natrona County bonds

*1995: Wyoming Medical Center purchases $31.8 million in bonds to help finance a building addition project

*2003: WMC refinances 1995 bond issue

*2005: Previous bond actions folded into bond swap agreement

*2006: WMC refinances $28.7 million in a bond swap overlay

*2007: Bond swap overlay transaction actually occurs

*May 2008: County Commission authorizes termination of bond swap and swap overlay if and when WMC sees fit

*July 2008: WMC requests termination of swap and swap overlay and early redemption of the remaining $27.6 million in bonds; County Commission approves transactions