HJ Sims closed on a $77.6 million refinancing and capital project package on behalf of John Knox Village, a life plan community for age- and income-qualified residents in Pompano Beach, Florida. Read more in Senior Housing News.
There are two vaccines for COVID-19 awaiting approval by the U.S. Food and Drug Administration, signaling that there is an end to the pandemic on the distant horizon. However, the impact of the outbreak on the seniors housing industry may be long-lasting.
A group of the industry’s top brass recently suggested that many of the changes made to adapt to the virus may in fact be permanent, and operators should prepare for this.
Read more in Seniors Housing Business.
FOR IMMEDIATE RELEASE
November 23, 2020
CONTACT: Tara Perkins, AVP | 203-418-9049 | firstname.lastname@example.org
HJ Sims Successfully Underwrites Pavilion Project and Refinancing for John Knox Village in Pompano Beach
FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful closing of an October 2020 refinancing and capital projects financing in the amount of $77,605,000 for John Knox Village (JKV), a life plan community for age- and income-qualified residents in Pompano Beach, FL.
JKV sought assistance in restructuring its capital stack while issuing additional debt to develop amenity spaces to serve existing and attract new residents to the potential Westlake Tower expansion. JKV was seeking financing options for a new community pavilion, including dining facilities and related amenities, a new lake, various parking spaces and a new central energy plant (Pavilion Project). Sims was ultimately engaged by JKV as the COVID-19 pandemic was declared.
Sims provided multiple financing scenarios to analyze considering the volatility of the bond market and bank lending environment, which ultimately led to the selection of long-term fixed rate bonds for the 2020 financing. Working alongside JKV’s board, management and financial advisor, Sims prepared JKV for the Fitch-review process as they sought a material increase in their debt, ultimately retaining their Fitch A- credit rating with a negative outlook.
Sims priced the JKV Series 2020 Bonds during a week of near record volume, surpassing expectations and executing on a majority 4.000% or lower coupon structure to minimize the debt service burden. Sims also worked alongside JKV and its legal counsel to modernize certain aspects of JKV’s existing master trust indenture, providing additional flexibility for JKV in anticipation of the potential Westlake Tower expansion. The final pricing increased maximum annual debt service by just over $2.5 million for over $58 million in new long-term debt. The Series 2020 Bond issuance, as underwritten by Sims, is expected to provide a stable platform upon which JKV may continue to grow as it nears its fifth decade of service.
“Modernizing a Life Plan Community is a stressful endeavor on its own. Adding the stress of financial markets, budgets, forecasting and legal documents can be overwhelming for governance, management and residents. A good financing team is the key to wading through these waters. HJ Sims built a strong financing team, and broke down a complicated process into easily understood digestible parts. The results left this Community the ability to afford the facility, which will position John Knox Village as continued market leaders of senior lifestyle for generations. Working with Aaron and Melissa has been a pleasure; they are part of my team and I expect to continue to use their counsel in the future. I would recommend this firm highly,” said Bruce Chittenden, CFO, JKV.
Financed Right® Solutions—Aaron Rulnick: 301-424-9135, email@example.com |
Melissa Messina: 203.418.9014, firstname.lastname@example.org.
ABOUT HJ SIMS: Founded in 1935, HJ Sims is a privately held investment bank and wealth management firm. Headquartered in Fairfield, CT, Sims has nationwide investment banking, private wealth management and trading locations. Member FINRA, SIPC. Testimonials may not be representative of another client’s experience. Past performance is no guarantee of future results. Facebook, LinkedIn, Twitter, Instagram.
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HJ Sims successfully underwrites pavilion project and refinancing for John Knox Village in Pompano Beach, Florida.Continue reading
by Gayl Mileszko
Our seasonal favorite, “Over the River and Through the Wood” was originally published in 1844 as a poem written by Lydia Maria Child and later set to music by a composer still unknown. Over the years, many of us have grown up singing this joyful song en route to celebrate Thanksgiving with family, sometimes changing the lyrics but never the melody:
Over the river, and through the wood, to Grandfather’s house we go;
the horse knows the way to carry the sleigh through the white and drifted snow.
Over the river, and through the wood, to Grandfather’s house away!
We would not stop for doll or top, for ’tis Thanksgiving Day.
Over the river, and through the wood— oh, how the wind does blow!
It stings the toes and bites the nose as over the ground we go.
Over the river, and through the wood— and straight through the barnyard gate,
We seem to go extremely slow, it is so hard to wait!
Over the river, and through the wood— When Grandmother sees us come,
She will say, “O, dear, the children are here, bring a pie for everyone.”
Over the river, and through the wood— now Grandmother’s cap I spy!
Hurrah for the fun! Is the pudding done? Hurrah for the pumpkin pie!
This year, AAA predicts that only 47.8 million Americans, about 15% of us, will travel for this Thanksgiving holiday, with 95% of us planning to go by car, 2.4 million flying, and 353,000 traveling by bus, train or cruise. This would be the greatest year-over-year drop since 2008 and it could be the biggest on record, all as a result of COVID-related concerns. There are quarantine policies, public transit fears, and government advisories or restrictions on activities, the size gatherings, business hours and configurations. Many argue that, after eight months of unprecedented pandemic-induced separations and deprivations, this year — more than any other — is the time for us to gather and give thanks for all we have endured. But there are also many sound justifications for pause, for distance, for establishing what may be new traditions for virtual celebrations. There are also plenty of great new excuses for avoiding angry dinner time political arguments, awkward moments with crazy Uncle Harry, and Aunt Edna’s mincemeat tarts.
The average age of a first-time grandparent is 50 and, at AARP’s last count, there were more than 70 million grandparents in the United States. For those who long to travel, families will think long and hard about the wisdom of descending on grandmother and grandfather’s house so as to significantly limit the risk of spreading a virus that poses such a fatal risk to those in their age group. Recent studies show that the infection fatality rate for COVID-19 increases from 0.4% at age 55 to as high as 15% at age 85. The CDC reports that, through the 12th of November, 92 percent of COVID-19 deaths nationwide have occurred among those ages 55 or older.
One in ten grandparents lives in the same household with their grandchildren, and 5 percent of those are primary caregivers, so for these families no travel through the woods would be necessary this Thanksgiving anyway. But for the six or seven percent who live in assisted living communities or skilled nursing facilities, it has not been possible for family to get through the barnyard gates to visit or share a pie for eight long months. It has been so hard to wait … and yet the wait goes on.
Financial markets will slow next week, fewer new deals with come to market as traders and buyers pause for the all-American holiday. The pace of issuance, of initial public offerings, of horse trading, has been frenetic this year. The investment community is exhausted by the recession induced by the pandemic, the market volatility, the uncertainty, the months of living with the devastating impacts on schoolchildren and small businesses, the toppling of industry titans and explosive shift in demand for technology, the massive central bank interventions and staggering levels of stimulus during a polarized election season that seems never ending. We have lived with fear and the fear of missing out, yearning for yield and vaccines, with new perspectives on the differences in how our states operate, with varying degrees of loathing and respect for our branches of government. We have forged many rivers and are taking the best paths we know, but are not yet out of the woods.
At HJ Sims, our veteran banking, underwriting, sales and trading professionals are working with our clients on year-end strategies, income needs, refinancing options, and planning for 2021. Our base assumption is that we will be in a low rate environment for several more years, so we are structuring financings for our borrowers at the lowest competitive rates while finding the highest yielding, income-producing instruments most suitable for our loyal investors. We will be working through the holidays as we have a number of new issues scheduled through year-end and into the new year, and our trading, advisory and sales teams are always active.
In response to preliminary election results, economic data, fizzled stimulus hopes, promising vaccine developments, and news reports of surging case counts, the equity, bond and commodity markets have all generally rallied this month. Historic correlations remain askew. Since the end of March when pandemic lockdowns began and market turmoil peaked, the Dow is up 36% and the S&P 500 40% while the Nasdaq and Russell 200 have soared by 55%. Ten-year Baa-rated corporate bonds yields have fallen 174 basis points to 2.86%. Oil prices are up more than 104% a barrel to $41.21. Gold prices have gained 18% an ounce to $1,886. Although 10- and 30-year Treasury yields are up, 2-year yields have dropped 26% to 0.17%. Top-rated municipal bond yields have plummeted across the curve: the 2-year is down 90 basis points to 0.16%, the 10-year is down 56 basis points to 0.77% and the 30-year is down 48 basis points to 1.51%. Non-rated bonds priced last week came with yields in the range of 5.50% in 2050.
Back in the fall of 1621 in Plymouth, Massachusetts, there was a bountiful harvest after a year of sickness and scarcity. Pilgrims celebrated a tradition called the Harvest Home. Massasoit, a leader of the Wampanoag People, along with 90 of his men joined the English for three days of entertainment and feasting. No one knew what the coming days, months or years would bring. Three hundred and ninety nine years later, we are still unsure of what the future has in store. But we know that having somewhere to go is home, having someone to love is family, and having both is a true blessing. To all our valued staff, loyal clients, industry colleagues, to all the grandparents among the thousands of residents living in communities that we have been privileged to finance, we at HJ Sims wish you a very happy Thanksgiving.
Exclusive Opportunities For Our Clients
by Gayl Mileszko
Preston Edward Buckley, 103, of Perrytown, North Carolina drove himself to his local board of elections five miles away in Warrenton and, for the first time in his 82 years of voting, cast his general election ballot curbside. A native of Carroll County, Tennessee, Mr. Buckley is a World War II veteran who became one of the first African-Americans to serve on the New Jersey Highway Patrol. After retirement, he moved to North Carolina and became an investigator for a law firm. A proud citizen, born three years before the 19th Amendment gave women the right to vote, he served as a poll watcher and even conducted voting workshops well into his 90’s. Mr. Buckley along with the rest of his neighbors in the Tar Heel State are still waiting for the final tallies. More than one million absentee ballots were cast there and those postmarked on or before November 4th with the proper signatures will be accepted up until this Thursday, November 12th. Results are expected to be certified on Friday.
The Associated Press (“AP”) has been counting the vote for 170 years, tabulating results, and declaring unofficial winners on Election Night or soon thereafter. This year, the AP has again called most of the 7,000 races it followed, starting with the two state results first declared at 7 p.m. on Election Night, culminating with the presidential race on November 7 at 11:26 a.m. The pandemic altered the method of voting for millions of Americans and turnout was well above average. Our patience in an era which generally affords us instant gratification has been tested this time by the closeness of the vote in key areas, the markedly different procedures and deadlines adopted by individual states, the slowness of mail-in vote tallies, and polling that proved to be way off base. Several recounts will soon occur and more than the usual number of lawsuits are being filed to, among other things, halt the count, disqualify tranches of ballots, and compel closer observation of the counting process.
Wall-to-wall media coverage of all the twists and turns began well ahead of the first absentee votes which began arriving a month and a half before Election Day. Estimates vary, but a fair number of the 157.6 million registered voters have new questions about the integrity of the process. Debate on reforms at the local, state and federal level will no doubt ensue, shaped by this year’s post-mortems as well as promising new technologies. In the meantime, our republic awaits official election results in the form of individual state certifications in the coming days and weeks, the official votes of the Electoral College on December 14th, and the final count by Congress on January 6th.
Wall Street has already conducted its own tallies, digested results which appear to confirm a divided federal government, lessened regulatory and tax hike risks, GOP control of state houses and legislatures, and no earth-shattering referendum outcomes. Stocks had their biggest post-election rally in over a century. Treasuries also staged a massive rally, propelling municipal and corporate bonds. On the heels of the investor relief rally came the news that Pfizer and BioNTech reported that their Covid-19 vaccine is more than 90% effective. The Dow and S&P 500 indices jumped again, hitting record highs, as investors cheered the prospect of controlling the disease that has derailed our economy for most of the year and killed more than 239,000 of our citizens.
Since the start of the month, the CBOE Volatility Index, dubbed the Fear Index, has dropped 35% to 24.80. The Dow is up 11% to 29,420. The S&P 500 has gained 275 points or more than 8% to 3,545. The Nasdaq is up 642 points to 11,553. The Russell 2000 has gained 198 points or 13%. Oil is 16% higher at $41.36. Gold prices have increased $3 an ounce. As investors turn to risk assets in the twin relief rallies, pundits might expect bonds to have sunk. Treasuries have, in fact, weakened over these past 10 days. The 2-year yield is 3 basis points higher at 0.18%, the 10-year has added 8 basis points to sit at 0.95% and the 30-year yield has increased 9 basis points to 1.74%. However, the 10-year Baa corporate bond yield has dropped 12 basis points to 2.91%. The 2-year AAA benchmark municipal yield has fallen 1 basis point to 0.20, the 10-year yield dropped 7 basis points to 0.86% and the 30-year yield has fallen 10 basis points to 1.61%.,
Since Election Day 2016, the Dow has gained 61%, the S&P is up 66%, the Russell 2000 has increased by 45% and the Nasdaq by 123%. Oil prices are 8% lower and gold is 47% higher. Ten-year Treasury yields are 35% lower. The lowest investment grade corporate yields have dropped 41%. 10-year tax-exempt yields have been reduced by half from where they stood at 1.71%.
The past two weeks have seen blockbuster corporate issuance but a light municipal calendar. The 30-day visible supply of municipal bonds only totals $7.9 billion. Ahead of the elections, state, local and non-profit borrowers came to market at a fast and furious pace. Mid-October saw the second largest competitive sale week on record. The volume was easily absorbed by a market with unrelenting demand for tax-exempt bonds and newfound demand for taxable and corporate CUSIP supply bolstered in part by foreign demand which has doubled year-over-year. Overseas buyers are discovering new diversification within rating categories, a notable pickup in spread, additional value, less credit risk than with investment grade corporate bonds, and a lot more yield than in their own sovereign debt.
High yield municipal bonds and longer maturities have been outperforming shorter investment grade counterparts in the latest risk-on environment. This class has been stressed throughout the pandemic as investors feared the pandemic’s long-term impact on airlines, airports, mass transit, toll roads, smaller universities, rural hospitals, and nursing homes. But buyers tired of seeing months of negative real returns on short investment grade holdings and mutual funds, and recognizing the essentiality of these institutions, facilities and services in their own communities are buying individual bonds again. In the past two weeks, we have seen Edkey Charter Schools come to market with an $87 million non-rated deal structured with 35-year term bonds priced at 5.00% to yield 5.125%. Judson Park, Judson Manor, and South Franklin Circle life plan communities in Ohio, borrowed $83.8 million in a BBB-minus financing that featured a 2050 term bond priced at 5.00% to yield 4.19%. The Tahoe-Douglas Visitors Authority sold $112 million of non-rated revenue bonds including a 2051 maturity priced at 5.00% to yield 4.47%. And Missouri Slope Lutheran Care Center in Bismarck, North Dakota had a $78 million non-rated transaction with a final maturity in 2056 priced with a coupon of 6.625% to yield 6.85%.
Bond markets closed on Wednesday in observance of Veterans Day. We at HJ Sims thank Preston Buckley of Perrytown, North Carolina and all the veterans who have sacrificed much to defend our precious freedoms, namely: those of speech, religion, press, assembly, and the right to petition the government for a redress of grievances.