HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful $53,050,000 financing of Trinity Springs, a new assisted living and memory care community that will be located in Wildwood, FL.
Trinity is owned byElim Senior Housing, Inc. (Elim), an affiliate of Elim Care, Inc., a MN 501(c)(3) headquartered in Eden Prairie, MN with the purpose of providing housing, health care and support services to older adults.Trinity will consist of 107 assisted living apartments, 48 memory care assisted living units with 54 beds and 2 guest suites and will be located immediately adjacent to The Villages, a 55+ age-restricted, master planned community.
Sims was selected by Elim as its financing partner to help with its first start-up project in the Florida market. Elim recognized that Sims’ experience with local authorities, regulations and financing team members’ local knowledge and long-time experience with both start-up and rental projects in the Florida market would benefit the financing.
Trinity was constrained in its total borrowing capacity based on anticipated future cash flows. Sims worked with Elim to evaluate long-term financing options such as tax-exempt, long-term fixed rate bonds and a traditional bank loan. It was determined that even though a traditional bank loan would offer a slightly lower interest rate, it would not be the best option for financing due to loan-to-value constraints. Tax-exempt, long-term fixed rate bonds would allow Elim to lock in a low fixed rate for 35 years without regard to loan-to-value constraints or future refinancing risks.
Following the outcome of the Presidential Election, interest rates rose dramatically, and Sims worked with Elim to strengthen project cash flows, including scaling back the project to remove the planned independent living units. This new unit structure strengthened cash flow projections in the early years of operations and bolstered the projected debt service coverage and days cash-on-hand ratios. To provide additional credit support desired by the market, Elim Care, Inc. entered into an unfunded liquidity support agreement for the project. Sims designed a tax-exempt bond structure with four maturities ranging from ten to thirty-five years to best take advantage of investor desires and market conditions.
Sims closed in August 2017 on $53,050,000 tax-exempt bonds issued through the Capital Trust Agency. Approximately $8 million of the Series 2017 bonds were purchased by 17 institutions with strong individual investor participation through Sims’ private client group investor network. The final financing structure had four maturities with a final maturity in 35 years. Elim contributed $1,225,000 in equity. The overall arbitrage yield on the entire issue was 5.78%.
“Mark Landreville and the Sims team delivered exactly what we needed. At a time when the market was in turmoil, Sims’ calm, steady approach crafted a financing package that allows us to expand our mission, diversify our services, and provide care and comfort for a new generation of older adults,” said Robert Dahl, President and CEO, Elim Care, Inc.
For Financed Right® solutions, contact Mark Landreville at mlandreville@hjsims.com.
ABOUT HJ SIMS: Founded in 1935 on Wall Street, HJ Sims is a privately held investment bank and wealth management firm with $2.2 billion of assets under management. HJ Sims is one of the country’s oldest underwriters of tax-exempt and taxable bonds, having raised $22 billion for projects throughout the US. The firm is headquartered in Fairfield, Connecticut, with investment banking, private client wealth management and trading nation-wide. Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, is custodian of all client assets. HJ Sims is not affiliated Trinity Springs or Elim. www.hjsims.com/ourstory.
