FAIRFIELD, Conn., Jan. 30, 2017 /PRNewswire/ -- HJ Sims, a privately held investment bank and wealth management firm founded in 1935 on Wall Street and celebrating more than 80 years of service, is pleased to announce the refinancing of Presbyterian Retirement Communities (PRC), dba Westminster Communities of Florida, the largest group of life plan communities in FL and the tenth largest US nonprofit operator of senior living communities.
As interest rates continued to decrease in the first half of 2016, HJ Sims worked with PRC to evaluate and monitor potential refunding opportunities. PRC engaged HJ Sims in August 2016 to advance refund its 2010A bonds and fund up to $45 million of new money for capital projects. HJ Sims worked with PRC to achieve the following strategic objectives:
- Reduce overall cost of capital and annual debt service and increase debt capacity;
- Utilize additional debt capacity to borrow new money without affecting credit rating;
- Provide improvements to financial covenants.
To meet PRC's financing objectives, HJ Sims worked with the Obligated Group to produce multiple refinancing structures, monitor the capital market environment throughout the financing process and adjust as conditions changed to maximize annual Net Present Value savings on the refunding portion of the issue. HJ Sims limited aggregate Maximum Annual Debt Service for the proposed 2016 issue in combination with PRC's existing debt.
HJ Sims successfully closed the $160,365,000 issue on December 15, 2016 with an all in True-Interest-Cost of 4.27%. On a present value basis, the refunding saves PRC approximately $9.421 million, with actual aggregate savings of approximately $34.8 million through the life of the prior bonds.
As of result of the financing, PRC was able to achieve the following objectives:
- Reduce overall cost of capital: PRC was able to take advantage of historically low interest rates and borrow for the Series 2016 bonds;
- Provide additional debt capacity, maintain rating: Savings from the refunding provided capacity for PRC to borrow additional funds for capital improvements with little impact to the Obligated Group's overall Maximum Annual Debt Service, maintaining a Fitch rating of "A-";
- Improvement to covenants: PRC was able to reduce its Debt Service Reserve Fund requirement for the 2016, saving PRC approximately $2.35 million in borrowing costs from the prior requirement. Improvements were made to the covenants, allowing PRC to transfer assets or cash money in and out of the Obligated Group with less restrictions.
"We expected this advanced refunding to be a fairly routine bond issue. As it turns out with the election and a lot of refinancings and borrowings in the market, this was not a routine bond issue. HJ Sims provided the additional resources, time and years of experience to accomplish all of the goals that we had set out at the beginning of the process. Thank you HJ Sims for your continued support of our mission," said Hank Keith, CFO, Presbyterian Retirement Communities, Inc., dba Westminster Communities of Florida.
"HJ Sims is pleased to have structured and executed another flexible Financed Right® solution to meet a valued client's needs," said Rob Gall, Senior Vice President, HJ Sims.
ABOUT HJ SIMS: Founded in 1935 on Wall Street, HJ Sims is celebrating more than 80 years of service as a privately held investment bank and broker-dealer with $2.2 billion of assets under management. HJ Sims is known as one of the country's oldest underwriters of tax-exempt and taxable bonds, having raised $22 billion for projects throughout the US. The firm is headquartered in Fairfield, Connecticut, with investment banking, private client wealth management and trading offices in Maryland, Massachusetts, Florida, Minnesota, New Jersey, Pennsylvania, Texas and Puerto Rico. Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, is custodian of all client assets. HJ Sims is not affiliated with Presbyterian Retirement Communities. Please visit: www.hjsims.com/ourstory. Investments involve risk, including the possible fluctuation of principal. Member FINRA, SIPC. Follow HJ Sims on Facebook, Twitter and LinkedIn.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hj-sims-announces-advance-refunding-of-presbyterian-retirement-communities-outstanding-bonds-allows-for-34-million-in-gross-savings-over-life-of-prior-bond-issue-300398637.html
SOURCE HJ Sims