Kendal on Hudson (May 2022)

HJ Sims successfully completes $38.4 million BBB+ rated Forward Bond Refunding and $15.5 million Bank Refinancing

“HJ Sims, led by Jim Bodine and Siamac Afshar, played a leadership role in the successful completion of our refinancing – a complex two-part transaction combining bank financing and a forward placement on bond financing. Sims worked closely with our Financial Advisor, Hamlin Capital Advisors, in formulating and completing the refinancing.  The combined refinancing has reduced debt service cashflow by nearly 50%.  The refinancing significantly improves our capital structure, strengthens our financial position and allows us to support our mission of providing our residents with high quality service and care. The refinancing included securing a credit rating upgrade to BBB+ (Positive Outlook), effectively navigating an extended State approval process, and accomplishing the refinancing in the midst of a rapidly rising interest rate environment. Jim’s years of experience, both broadly, and with Kendal on Hudson specifically, proved invaluable in keeping the refinancing on track through a successful pricing and initial closing. Kendal on Hudson’s relationship with HJ Sims dates back to our founding with Sims’ placement of seed capital followed by start-up project financing. We are grateful to HJ Sims for their leadership in seeing us through this most recent financing and look forward to a continuing working relationship going forward.”

– Jean Eccleston, Chief Financial Officer

Partnered Right®

Opening in 2005, Kendal on Hudson (“KoH”) owns and operates a continuing care retirement community (“CCRC”), located on a scenic 21-acre site in the Village of Sleepy Hollow, Westchester County, NY overlooking the Hudson River and is an affiliate of the Kendal Corporation. The Community consists of 222 independent living units, 34 enriched housing units, 13 memory care units and 26 skilled nursing beds.

HJ Sims and Mr. Bodine have a nearly two-decade relationship with KoH as HJ Sims financed the original start-up financing of KoH with a seed capital financing which was followed by a permanent tax-exempt bond financing in 2003. Following the initial seed financing and ultimate permanent bond financing, Mr. Bodine worked on refinancing and new capital financing for KoH, in 2013 and 2014, respectively.

Structured Right®

The Series 2022 refinancing was comprised of two components undertaken in two-steps: i) a forward bond refinancing of KoH’s Series 2013 Bonds followed by ii) a current refinancing of KoH’s Series 2014 Bank Debt with Key Bank to a new banking partner, BankUnited.

As the Series 2013 Bonds did not become callable until January 1, 2023, KoH did not become eligible for tax-exempt refunding until October 2022. In order to comply with Federal tax law restrictions on traditional “advance refundings”, the Series 2022B Bonds, refinancing the Series 2013 Bonds, were sold in April 2022 with forward delivery in October 2022. The Series 2022A Bonds, refinancing the Series 2014 Bank Debt, closed in May 2022. As part of refinancing the Series 2013 Bonds, KoH extended the final maturity of the Series 2022B Bonds by 17 years in order to better align the useful lives of the Community assets and associated debt. This allowed KoH to create a level overall debt structure and reduced annual debt service obligations by over 40%, providing savings and flexibility to KoH, which will translate to furtherance of their mission.

The refinancing of the Series 2014 Bank Debt, ahead of an upcoming put date, allowed KoH to secure a new long-term credit commitment, with a fixed interest rate, for the remaining, 19-year, life of the financing, eliminating committed funding risk on all of KoH’s outstanding debt.

Executed Right®

HJ Sims and the Financial Advisor (“FA”) worked with KoH Management to conduct a robust bank solicitation, resulting in a number of attractive proposals. BankUnited was ultimately selected due to their favorable interest rates, including a balance sheet-based fixed-rate, without the requirement for a swap, and willingness to provide committed funding through debt maturity in 2041.

As a part of the financing, HJ Sims and the Financial Advisors led the effort, along with KoH Management to secure a credit rating update from Fitch including pursuit of a desired rating upgrade. This goal was realized with an upgrade from “BBB” to “BBB+” along with a positive outlook – a notable accomplishment. The upgrade enabled reduced interest cost for refinancing and increased debt service savings. Refinancing savings were further augmented by elimination of a funded Debt Service Reserve Fund (“DSRF”) for the Series 2022B Bonds, allowing for application of the existing DSRF to reduce the size of these refunding bonds, without impacting the rating on the Bonds.

Financed Right®

HJ Sims worked with KoH and its working group to navigate the New York State Department of Financial Services approval process. KoH leveraged HJ Sims professionals to express the urgency of review such that KoH and its residents not be exposed to further increased cost due to the rapidly rising interest rate environment. These efforts expedited the review process allowing KoH to enter the market in April 2022.

HJ Sims successfully sold the $38.4 million Series 2022B Bonds on a forward basis navigating a highly volatile market and continuing interest rate increases. HJ Sims effectively positioned KoH’s strong and improving credit profile, including elimination of a funded DSRF, and built a strong order book during pricing. generating orders in excess of five times the number of bonds available. This ultimately allowed HJ Sims to reprice the bonds and commit to a bond purchase, resulting in interest rate reductions of 0.03-0.10% during the order period, and an attractive optional redemption provision of five years at 103%. This strong marketing effort allowed KoH’s bonds to be sold at lower interest rates than a similar CCRC bond issuance priced a month earlier and in a lower interest rate environment. This strong marketing effort and rate reduction, generated increased debt service savings along with greater future flexibility to KoH in managing its outstanding debt.

For more information, please contact:

Jim Bodine


Siamac Afshar


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