Ziegler announced the closing of Covenant Living Communities and Services $146.46 million Series 2025A tax-exempt bonds. The bonds were issued through the Colorado Health Facilities Authority. Ziegler and CLCS have been partners for over 30 years. CLCS is a not-for-profit organization established to operate a multi-site system of CCRCs on behalf of the Board of Benevolence of The Evangelical Covenant Church. It currently operates 20 communities in 11 states with over 5,900 total units, including communities inside and outside of the Obligated Group.
Proceeds of the Series 2025A bonds will be used to fund approximately $85 million of new money project costs as well as to currently refund various series of outstanding debt. The projects include incremental independent living units at its Great Lakes Campus in Grand Rapids, Michigan, the repositioning of its assisted living and memory care program at the Turlock, California campus, completion funds for a project at the Northbrook, Illinois campus, as well as various other renovations and enhancements at other locations throughout its system.
The refinancing portion of the issue was to refund the outstanding CLCS Series 2015A bonds as well as the outstanding Three Crowns Park Series 2013 and 2017 bonds. Although Three Crowns Park is not a member of CLCS Obligated Group, CLCS elected to absorb Three Crowns Park’s debt so that it could be refinanced with lower rates using the credit strength of the CLCS Obligated Group. All three refinancings resulted in material debt service savings for CLCS.
The Series 2025A bonds are rated “A-” by Fitch Ratings. Investor reception to the issue was very strong, despite volatility and market uncertainty at the time of pricing. Based on market conditions, Ziegler recommended that CLCS accelerate the pricing of the bonds by a week, and priced the issue on March 25, 2025, rather than in the subsequent week.
