Ziegler Closes $85 Million Financing for Presbyterian Manors, Inc.

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Ziegler, a specialty investment bank, is pleased to announce the successful closing of the $85,055,000 unrated, taxable and tax-exempt, fixed-rate Series 2013 Bonds for Presbyterian Manors, Inc. (PMI). PMI is a Kansas not-for-profit corporation, originally incorporated in 1948.

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Despite a challenging capital markets environment, the Presbyterian Manors, Inc (PMI) bond issue was well-received by both retail and institutional investors.

Ziegler, a specialty investment bank, is pleased to announce the successful closing of the $85,055,000 unrated, taxable and tax-exempt, fixed-rate Series 2013 Bonds for Presbyterian Manors, Inc. (PMI). PMI is a Kansas not-for-profit corporation, originally incorporated in 1948. PMI and its predecessors have operated Presbyterian Manors communities in Kansas and Missouri for more than 65 years. In connection with the Series 2013 financing, PMI and its affiliate, Aberdeen Village, Inc. (AVI) will form an Obligated Group.

PMI owns and operates 16 senior living communities in Kansas and Missouri, with an aggregate of 508 independent living units (ILU) (349 congregate apartments and 159 duplex/cottage units) and 1,346 licensed beds, consisting of 470 assisted living units (ALU) and 876 nursing beds. AVI owns and operates a senior living community in Olathe, Kansas constructed in 2000 and 2001, which has 90 ILUs, 41 ALUs and 60 nursing beds. PMI and AVI are the only members of the obligated group.

A portion of the Series 2013 Bonds will be used to reposition the Wichita, Kansas campus of PMI pursuant to a two-phase redevelopment plan prepared by PMI and Greystone (PMI’s development consultant with respect to the Wichita project), and to finance and reimburse PMI for approximately $11.3 million of other capital improvements to certain PMI senior living communities in Kansas. The purpose of the two-phase redevelopment plan for the Wichita Community is to refresh the Community and enable the Wichita Community to better serve its residents and increase the Community’s ability to compete with other senior living facilities. Phase I involves assisted living and nursing, while Phase II will pertain to entrance fee independent living units and is currently planned to occur in 2014. The Series 2013 financing relates to Phase I of the redevelopment plan. The Wichita project is currently expected to replace the assisted living and existing nursing beds and related common areas with new residential-style assisted living apartments, memory support assisted living suites and a new skilled nursing facility, a portion of which is intended to be dedicated to post-acute-to-home rehabilitation (PATH unit). Phase I of the project will serve to reposition the campus rather than expand it, and the total units/beds will be reduced from 173 to 162 after completion of Phase I. The new units and common areas will be more attractive to residents and the monthly fees will be higher than prior to the redevelopment. Over time, the Phase I and II repositioning projects will have a positive impact on the financial success of PMI.

In addition to the repositioning project and the funding of various capital expenditures throughout the PMI system, bond proceeds will be used to refund and advance refund PMI’s Series 2004 and Series 2007 Bonds, outstanding in the amounts of $17.865 million and $18.97 million, respectively. Bond proceeds will also fund two debt service reserve funds, interest on the repositioning portion of Phase I of the Wichita project for one year and the costs of issuance. Taxable bonds of $7 million were issued primarily to advance refund a portion of the Series 2007 Bonds which were ineligible for advance refunding with tax-exempt bonds. The Series 2013 Bonds have been structured in careful coordination with certain existing debt of PMI and Aberdeen Village, thus creating a primarily fixed-rate capital structure that will serve the Obligated Group well for the next 35 years. The primary reason for the refunding of the Series 2004 and 2007 Bond issues with the Series 2013 Bonds was to create a long-term capital structure with annual debt service payments which are well-matched with the forecasted revenue stream.

Will Carney, Managing Director in Ziegler’s Senior Living practice, stated, “Despite a challenging capital markets environment, the Presbyterian Manors, Inc (PMI) bond issue was well-received by both retail and institutional investors. PMI’s strong market reputation, high occupancy levels and quality of care reputation all contributed to a successful underwriting.”

For further information on the structure and use of this issue, please see the Official Statement located on the Electronic Municipal Market Access system's Document Archive.

For more information about Ziegler, please visit us at http://www.Ziegler.com.

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Christine McCarty
Ziegler
312 596 1617
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