Kingfisher Regional Hospital is seeking approval for a loan refinancing the remaining construction debt at a special meeting at 5:30 p.m. Wednesday, July 28, at Chisholm Trail Museum.

“Due to a significant drop in interest rates, the Board of Directors has determined that refinancing the existing bond indebtedness will result in substantial savings in interest costs and will allow the debt to be retired earlier than under the bonds,” according to the notice of meeting.

Approval of the hospital membership is the last authorization needed for the refinancing loan through F&M Bank in Kingfisher, which is expected to save $1.8 million in interest costs and allow the debt to be much as 10 years earlier than anticipated.

The KRH board of directors and Kingfisher city commissioners already signed off on the decision.

Although the new hospital building is leased by and operated as Mercy Hospital Kingfisher, KRH owns the real estate and other physical assets.

Those assets are current ly mortgaged and pledged to the bond trustee.

Proceeds of the new loan will be used to pay off the original bondholders and the hospital assets will become collateral for the new debt.

Based on an amended sales tax agreement approved by Kingfisher city commissioners earlier this month, the 1% dedicated sales tax proceeds will be ap plied to pay off the new loan.

Approved by voters in 2009, the 25-year sales tax will expire no later than 2034, but the construction bonds weren’t anticipated to be repaid until eight years after that date.

The reduction in interest rate from 6.5-4.1% is expected to allow the debt to be repaid as early as 2032, at which time the sales tax will automatically expire.

The KRH board of directors and legal counsel will be available Wednesday night to answer any questions.

KRH members unable to attend the meeting are asked to sign the proxy delivered to them in the mail and return it to KRH President Pat Cheap prior to the meeting.

If approved by KRH members, the loan is expected to close next month.