HJ Sims was engaged by Asbury Atlantic, Inc. to refinance two of its CCRCs in Maryland with a combination of taxable and tax-exempt financing. Located in Gaithersburg and Solomons, the two communities were already saddled with higher-rate, tax-exempt bonds and other non-callable bonds with a balloon maturity.
Sims successfully extended a taxable bank loan that was used to pay the termination fee for a swap that remained outstanding after the underlying bonds were refunded. The team then closed $96.12 million in tax-exempt bonds, which include proceeds to fund capital expenditures and free up operating cash to partially repay the taxable bank loan to make the swap termination payment.
The bonds were priced and closed with spreads over the MMD index ranging from 56 to 78 basis points for maturities from January 1, 2023 to January 1, 2036. In the end, Asbury Atlantic received $8.3 million in net present value savings and reduced its maximum annual debt service without extending the overall maturity of the indebtedness.