Ziegler has had a busy start to the month by underwriting three separate bond financings.
The first set of bonds was issued to Lifecare, Inc., a not-for-profit operator of Friendship Village in Kalamazoo, Michigan. It consists of an $8.685 million bond issued through the Michigan Strategic Fund and an $11.965 million bond issued through the Economic Development Corporation of the City of Kalamazoo. The proceeds will be used to refund outstanding debt, terminate an interest rate swap and reimburse cost of capital expenditures.
The bonds have a 30-year maturity with a weighted average yield-to-call of 3.42% and a weighted average yield-to-maturity of 4.08%. The call provisions included bonds callable in seven years at 103% declining to par in 10 years. These bonds signify Ziegler’s fifth transaction with Friendship Village Kalamazoo.
The second set of bonds was issued to Otterbein Homes, a tax-exempt corporation providing senior care and home health services throughout Ohio and Indiana. The bonds were issued through the State of Ohio, proceeds of which will be used to refund existing debt and pay off certain costs of issuance.
The $8.52 million “A” rated bonds are tax-exempt fixed rate serial bonds amortizing over nine years until maturity in 2030. The weighted average yield-to-call and yield-to-maturity are 0.946%, which at the time of this pricing was believed to be the lowest yields ever achieved by a senior living borrower for a public fixed interest rate offering. In 2020, Otterbein acquired Sunset Retirement Communities. Sunset will now be brought into Otterbein’s Obligated Group with this financing.
Finally, Ziegler closed a $154.6 million series of tax-exempt bonds issued through the Hospital Facilities Authority of Multnomah County, Oregon. Receiving the financing is The Parkview Project, a new independent living expansion at Terwilliger Plaza in Portland. The Plaza already consists of 246 independent living units, 43 assisted living unitsand 22 residential care beds. The independent living apartments are located in two buildings: a 12-story apartment building known as The Tower, and a 10-story apartment building known as The Heights. The Tower is adjacent to a single-story residential care facility known as Metcalf and attached by common areas to a four-story assisted living building known as the Terrace. All of the buildings are also connected by common areas, including dining venues, an auditorium, a wellness and aquatic center and a multi-level parking garage.
The expansion will consist of 127 one- and two-bedroom units and is expected to be complete in 2023. That results in approximately $1.21 million per unit of debt for the project, plus other uses we are sure.
