The bank bond financings keep coming from Ziegler, which recently closed another one on behalf of Presbyterian Village North located in Dallas, Texas. The not-for-profit CCRC was originally built in 2007 and now includes 89 buildings with 253 independent living units, 101 assisted living units, 44 memory care units and a skilled nursing facility with 106 operating beds and 172 licensed beds, all on a 66-acre campus.
Its sponsor is Presbyterian Communities and Services, Inc., d/b/a Forefront Living, which is planning an expansion project that will include 112 independent living units in a new five-story building, in addition to renovations to the existing campus common areas. Ownership is currently marketing 97 of those units, 73% of which are pre-sold, with the remaining 15 IL units being marketed once the 97 are all reserved.
So, to finance the cost of the expansion, a debt service reserve fund, capitalized interest and the cost of issuance, Ziegler arranged two series of bonds consisting of a $45.065 million Series 2020A portion sold publicly to institutional investors and $32 million in Series 2020B bonds placed with Frost Bank. The Series A bonds were structured as a single-term bond, with a 5.25% coupon to yield 5.34% and a final maturity of October 1, 2055. The financial covenants and security requirements are governed by the existing Master Trust Indenture implemented in conjunction with the Series 2018 Bonds. Seven institutions participated in the offering.
The Series B bonds were structured as non-bank qualified, tax-exempt debt that is privately held with Frost Bank and will be retired with the initial entrance fees from the project. Key terms included a 60-month bank maturity, all covenants matching the existing Master Trust Indenture including the Series 2018 and Series 2020A bonds, and a tax-exempt interest rate of 87.4% of one-month LIBOR plus 2.09%, with a LIBOR floor of 1.00%.
