HJ Sims Accomplishes an Intricate and Multi-faceted Refinancing for Aldersgate


CONTACT: Tara Perkins, AVP | 203-418-9049 | [email protected]

HJ Sims Accomplishes an Intricate and Multi-faceted Refinancing for Aldersgate

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 a July 2021 refinancing for $44,025,000 for Aldersgate United Methodist Retirement Community (Aldersgate), a continuing care retirement community in Charlotte, NC.

Sims partnered with Aldersgate in 2019 with a financing for Generations at Shalom Park. In 2020, Sims identified a refunding opportunity for Aldersgate’s outstanding Series 2013 Bonds. In 2017, the Tax Cuts and Jobs Act (TCJA) eliminated advance refundings using tax-exempt municipal bonds. Therefore, Sims utilized Cinderella Bonds, which would be taxable until the optional redemption date, after which the bonds would convert to tax-exempt, complying with TCJA. Sims proposed that the Cinderella Bonds be purchased by a commercial bank, eliminating the debt service reserve fund requirement for the Series 2013 Bonds. Sims customized the amortization schedule to optimize Aldersgate’s aggregate Maximum Annual Debt Service (MADS) creating an $185,000 in reduced MADS.

In 2021, Aldersgate pursued the Cinderella financing with Sims serving as Placement Agent. Sims and Aldersgate’s financial advisor, Pearl Creek Advisors, conducted a large bank solicitation and held a virtual site visit, requesting proposals for refinancing Aldersgate’s outstanding Series 2017B Bank Debt, which was privately held by Truist Bank. The goals of this refinancing included extending the put date, lowering the credit spread by 80 bps, and eliminating variable interest rate risk. 

Sims and Pearl Creek Advisors negotiated with multiple banks on behalf of Aldersgate to receive the most competitive terms, selecting Truist Bank, whose commitment featured attractive interest rates, a 12-year commitment period, covenants that largely conformed to Aldersgate’s master trust indenture, and a SOFR- (Secured Overnight Financing Rate) based loan. Sims coordinated with Aldersgate’s swap advisor, KPM Financial, to structure three SOFR-based swaps and to terminate the existing Series 2017B swap. The refinancing of the Series 2017B Bank Debt included a tax-exempt swap.

Aldersgate and Truist closed on the $28,685,000 Series 2021A Bonds to defease the Series 2013 Bonds and the $15,340,000 Series 2021B Bonds to refinance the Series 2017B Bank Debt. The Cinderella Bonds offer about $250,000 or $3,889,019 in total savings. The refinancing of the Series 2017B Bank Debt extended the put date by six years, eliminated interest rate risk through the commitment, and lowered the all-in swap rate from 3.9215% to 2.587%. Aldersgate increased its debt service coverage ratio by 0.14 bps.

“It was a pleasure and gift having Sims lead our organization through a successful refinancing. Sims has exceptional technical skills and provided our various stakeholders clear guidance and wise counsel every step. Their processes and people truly create an experience of allowing for alignment of the end goal being accomplished, with honoring our mission and the strategic vision to which we are committed. We are grateful for our partnership with Sims and look forward to future opportunities to work side-by-side toward exciting outcomes for the future of Aldersgate,” Suzanne Pugh, President/CEO, Aldersgate.

Financed Right® Solutions—Tom Bowden: 804.398.8577 | [email protected] or David Saustad: 214.909.8588 | [email protected]

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, TwitterInstagram.