First Community Village (March 2022)

HJ Sims Generates Annual Debt Service Savings for National Church Residences Affiliate in Rising Interest Rate Environment

“The HJ Sims team, led by Aaron Rulnick and Kerry Moynihan, provided tremendous guidance to First Community Village in the refinancing of the Series 2013 bonds in what became a rapidly increasing interest rate environment. The bonds were structured with fixed rates for the initial ten-year period to provide necessary cash flow savings to the organization. They also helped to negotiate beneficial covenants for the next 2 years for the campus. We could count on the Sims team to provide market intelligence on acceptable terms to FCV while always keeping in mind the operational goals of the refinancing. Their willingness and ability to think through alternative solutions was also appreciated as we worked to achieve the ideal refinancing.

 Aaron and Kerry are a great team who provide customer friendly analysis of a financing while always paying attention to the necessary details of the transaction. They are and have been great partners to First Community Village and the results ultimately benefit the seniors served on this campus.”

 — Tanya K. Hahn, Senior Advisor, National Church Residences

Partnered Right®

First Community Village (“FCV”) is a life plan community located in Upper Arlington, Ohio. The 32-acre campus includes a 68-bed skilled nursing center, a 38-unit assisted living center, 36 memory care assisted living suites, 86 luxury independent living apartments, 19 independent living Gardens apartments, 38 ranch-style manor homes and 67 new independent living units that opened in July 2021, together with a variety of related common and support areas.

FCV is an affiliate of and managed by National Church Residences. National Church Residences is also headquartered in Upper Arlington, Ohio with its offices located approximately seven miles from FCV. National Church Residences was organized in 1961 and owns or operates over 362 facilities in 24 states including:

  • 330 senior, supportive housing, and family affordable housing communities which contain 22,366 units,
  • seven assisted living facilities located in Ohio and Florida,
  • six home and community-based service agencies in Ohio serving approximately 450 clients with hospice, home health or homemaking service needs,
  • two adult care centers serving approximately 250 clients,
  • nine independent and assisted living communities located in Ohio and Florida, and
  • three CCRCs all located in Ohio.

HJ Sims has worked with FCV on financings since 2003. FCV again partnered with HJ Sims in 2022 to identify a refinancing solution for its 2013 debt and amend existing covenants to provide additional flexibility.

Structured Right®

The Series 2013 outstanding debt for FCV had an average coupon of 5.6% and was currently callable. HJ Sims identified that FCV could not only reduce the average coupon of its debt, but also extend the debt’s amortization and wrap it around the outstanding Series 2019A debt, such that maximum annual debt service would decrease by $350,000.

In addition to creating a structure for maximum savings, HJ Sims also negotiated a 7-year call provision that gives FCV the opportunity to refinance the Series 2022 bonds well ahead of the rate adjustment that is scheduled to occur in year 10.

Executed Right®

HJ Sims worked closely with management to negotiate the terms of the refinancing with one of FCV’s existing lending partners in January 2022. In addition to providing provisions for medium-term covenant relief, the terms also included a rate lock through March 31. By working with the same legal partners as the Series 2019 financing, HJ Sims was able to lead a seamless underwriting and documentation process that enabled a closing to occur less than 10 weeks from term sheet execution. The quick execution and rate lock proved vital as the underlying rate index increased over 90 basis points between the day of term sheet execution and the day of closing.

Financed Right®

On March 24, 2022, HJ Sims closed on the Series 2022 tax-exempt adjustable rate bond issue in the amount of $47,970,000. In keeping with the original objectives, the financing accomplished the following:

  • Generate Debt Service Savings: The refinancing generated approximately $350,000 of annual debt service savings which provides significant relief for the community.
  • Repay Parent Obligations: While National Church Residences will continue to support FCV via a limited guaranty until the community stabilizes, the organization is not required to fund the guaranty unless debt service support is actually needed. This revised agreement allowed for the existing liquidity support fund, with a balance of over $1.0M, to be returned to National Church Residences.
  • Provide Covenant Relief: As its recent independent living expansion continues to fill-up, medium term relief to the debt service coverage and days cash on hand covenants will give FCV the flexibility it needs to focus on stabilizing and repositioning its community for the long term.

For more information, please contact:

Aaron Rulnick


Testimonials may not be representative of the experience of other clients. Past performance is no guarantee of future results