When the largest operator of CCRCs in the state of Florida wanted to refinance in order to take advantage of the low interest rate environment, HJ Sims was happy to oblige. Presbyterian Retirement Communities, Inc., or Westminster Communities of Florida, with 2,025 independent living, 468 assisted living and 751 skilled nursing units in its portfolio, is not only the largest CCRC operator in the Sunshine State (with nine), but is also the 10th largest not-for-profit operator of senior living units in the country.
Founded in 1954, the organization targets the middle income market, with entrance fees ranging from $44,100 to $357,000, and averaging at $120,600. Westminster already worked with HJ Sims in August 2016 to advance refund its 2010A bonds and fund a $45 million capital project, but it also wished to reduce its overall cost of capital/annual debt service, increase its debt capacity so as to borrow new money without affecting its credit rating, and provide improvements to financial covenants.
Fulfilling those goals, HJ Sims closed a $160.37 million bond issue with an all-in true interest cost of 4.27% (the outstanding balance of the refunded bonds carried an average interest rate of 5.94%). The refinancing also saves Westminster approximately $9.42 million on a present value basis, with actual aggregate savings of approximately $34.8 million through the life of the prior bonds. Through all of this, Sims maintained the investment grade rating from Fitch of “A-.”
