Ziegler announced the closing of Luthercare’s $31.52 million Series 2025A and 2025B bonds (together the “Series 2025 bonds”). Luthercare is a Pennsylvania-based not-for-profit that currently operates two communities in Lancaster County, Pennsylvania: Luther Acres and St. John’s Herr Estate. They collectively feature 678 units.
Luther Acres is on 55 acres in Lititz and comprises 357 independent living units, 70 personal care units and 86 skilled nursing beds. St. John’s Herr Estate is on 48 acres in Columbia and includes 125 independent living units and 40 personal care units. Residents of St. John’s Herr Estate have priority access to the skilled nursing beds at Luther Acres, which is approximately 18 miles away. In addition to the senior living communities, Luthercare also operates two early childhood learning centers and is a 50% partner in a joint venture offering home care services. Luthercare previously owned Spang Crest, a 123-bed skilled nursing facility in Lebanaon County, Pennsylvania, which was sold in December 2024 with the assistance of the Ziegler Seniors Housing and Care team.
The Series 2025 bonds consist of two tranches of BBB+ Fitch rated public fixed rate bonds issued through the Lancaster Municipal Authority. Proceeds of the Series 2025 bonds, along with other funds, will be used to refund Luthercare’s Series 2016 and 2019 Direct Bank bonds, pay-off Luthercare’s line of credit and pay certain expenses incurred in connection with the issuance of the Series 2025 bonds.
The Series 2025A tax-exempt bonds ($29.79 million) represent the tax-exempt portion of the financing with a final maturity in 30 years, resulting in a weighted average maturity of 20 years and a blended average yield to maturity of 4.75%. The Series 2025B federally taxable bonds ($1.73 million) represent the taxable portion of the financing that was issued to pay off Luthercare’s line of credit. The Series 2025B bonds have a final maturity on December 1, 2026, and were sold at a taxable interest rate of 5.75%, which is significantly lower than the current variable rate on the line of credit. The new debt structure reduces Luthercare’s long-term annual debt service by more than half.
