HJ Sims Generates Significant Savings Through Bond Issue

American Baptist Homes of the Midwest successfully refunded its outstanding bonds with the help of HJ Sims, generating millions in savings in the process. Recently, across ABHM’s 13-property portfolio, the provider has funded repositioning projects at many locations, significantly lowering their cash reserves. So, HJ Sims worked to refund ABHM’s Series 2007 and Series 2009 bonds in a way that lowered the Obligated Group’s cost of capital. Sims priced a $61.785 million issue with an arbitrage yield of 4.811%. That generated a net present value savings of approximately $6.5 million, or about 11% of the par amount of the refunded bonds. And, ABHM will realize 82% of the savings within the first three years thanks to lower sinking fund payments. That should help with any cash crunch they may be experiencing. In addition, the average coupon decreased from 6.79% to 4.95%, helping rein in the company’s cost of capital even further.

 

 

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