Ziegler announced the closing of Series 2021 bonds for Christian Living Neighborhoods (CLC), a Colorado not-for-profit that provides housing, healthcare and community outreach programs for over 1,000 seniors and their families. CLC owns and operates three communities under the Christian Living Neighborhoods brand, comprising 782 units.
Proceeds of the bonds will be used to refinance existing Series 2011 and 2021 bonds, fund $11.8 million of capital expenditures at its Someren Glen property in Centennial, fund a deposit to the common reserve fund and pay the cost of issuance. The bonds will be non-rated with a maturity date in 2042, and will help better position CLC to pursue long-term strategic growth and reinvestment in the future.
CLN’s previous bond issues sized their reserve funds at the individual bond level, but they ultimately used a common reserve fund which resulted in lowering the reserve requirement by approximately $2.4 million. Since the Series 2011 and Series 2012 bonds are not callable until January 2022, the Series 2021 bonds were sold with a three-month forward settlement to October 2021 (90 days prior to the actual call date) to lock in favorable interest rates before market conditions deteriorated. Ziegler estimates that this transaction saved CLN approximately 50 basis points in yield, or over $150,000 of annual debt service. Net present value savings were approximately $6 million, or 23% of principal refunded. The average yield to call was 2.53%, and the average yield-to-maturity was 3.07%.
