Peter Becker Community (July 2021)

HJ Sims Successfully Completes $48.5 Million Refinancing and Expansion Project with 15-year Bank Commitment

“I found it to be extremely valuable to work with Jim Bodine and Siamac Afshar on our (re)financing. I personally do not have the expertise to fully evaluate the potential financing opportunities without their support. They were able to help attract a large number of banks that were interested in working with us and helped us to fully understand the potential of each offer. They provided direct updates to our board and team on every aspect of the process. Our organization has worked with Jim Bodine for the last 3 updates to our financing over a ten plus year period. He has continued to provide support and direction after the deals are done as we begin planning for future projects. His insight, as well as Siamac’s, have been a critical part of all our decision making related to our organizations growth plans. I feel fortunate to work with this team and plan to continue to do so.”

– Suzanne Owens, President & Chief Executive Officer, Peter Becker Community

Peter Becker Community Logo

Partnered Right®

Peter Becker Community is a not-for-profit (Type C) life plan community (LPC), located on an almost 100-acre campus in Harleysville, Montgomery County, Pennsylvania (“PBC” or the “Community”). Opened originally in 1971 as Peter Becker Memorial Home with 37 nursing beds and 35 residential beds under the vision of members of the Indian Valley Church of the Brethren “…to provide a home that was comfortable and secure with a Christian-like atmosphere where people could retire and be cared for when they could no longer care for themselves.”

Over the past 50 years, the Community has grown and been renewed in several cycles, currently offering a full continuum of services and care in a campus-based residential setting with a current unit/bed complement of 295 Independent Living Units, 40 Personal Care Units and 72 Skilled Nursing units. It has a strong track record of operation, financial performance and resulting financial position.

Building on prior roles in project financing and refinancing and subsequent debt and swap modification dating back to 2009, HJ Sims was appointed to assist PBC with development and ultimate implementation of a plan of finance both for the anticipated Cottages at Pondview Project along with exploration of options for PBC’s outstanding bank debt.

Structured Right®

As Phase II of PBC’s four stage Expansion & Modernization plan, the Cottages at Pondview project consists of 30 new Independent Living cottages in a pocket neighborhood sited in a central location within PBC’s existing campus. This project follows a recently-completed nine cottage addition (“Maplewood Crossings”) which was self-financed internally and repaid with entrance fees. Given the larger scale of the Cottages at Pondview project, including site development, infrastructure and phased construction of the units, PBC sought external financing. Additionally, PBC sought options for refinancing of its existing $29.5 million Series 2015 Bank Loan with Key Bank (originally First Niagara) and related interest rate swap(s).

Based on continuing favorable interest rates in the first half of 2021, the total capital needs, combined the new project and refinancing and anticipated strong bank appetite for the financing, Sims and PBC determined a direct placement with a commercial bank would be preferred, combining lower interest cost and reduced borrowing requirements. The objectives of the plan of finance included:

  1. Implement cost-effective construction financing combined with permanent financing for the Cottages at Pondview Project and Refinancing.
  2. Secure committed financing for as long an initial term (tenor) as possible…and unify this tenor for both new capital and refinancing…to minimize financing renewal and interest rate reset risk – at multi-decade low interest rate levels.
  3. Achieve a common financing security structure and unified financing covenants to maintain sufficient operating, financial and strategic flexibility.

Executed Right®

The solicitation package was sent to twenty prospective banks in March 2021 and resulted in strong interest – with receipt of seven competitive financing proposals. After careful evaluation of each bank’s proposal and follow-up negotiations, PBC selected Truist as its preferred commercial banking partner in April. Truist was selected based upon the provision of competitive interest rates, objectively-based covenant requirements, as outlined in the financing solicitation and willingness to provide 15-years of committed funding.

Additionally, Truist’s proposed financing accommodated PBC’s phased development plan, with unit construction starts staggered on a two week basis, to reduce overall borrowing requirements and debt service. Units are expected to be occupied as they complete construction, thereby accelerating the receipt of both entrance and monthly fees with a portion of entrance fees applied to reduce/repay debt.

Further, refinancing of the outstanding bank debt, including contemporaneous loan put and swap termination dates in 2025, allowed PBC greater flexibility in structuring repayment of the financing – such that principal on the new capital would begin amortizing following the repayment of the refinancing portion. Implementing this structure, along with a new Master Trust Indenture, allowed PBC to create an aggregate debt structure well within its expected operating cash flow and maintaining flexibility in its rate setting and expense structure as well as for future capital needs.

Financed Right®

The $48.5 million financing closed on July 23rd, 2021 as a direct tax-exempt bank financing with Truist. Approximately $28.5 million of proceeds were used to refinance the Series 2015 Key Bank Loan and pay the termination cost of its associated swaps, $18.9 million will be used to finance the Cottages at Pondview (with approximately $8.8 million expected to be deleveraged over the next two-three years with Entrance Fees). The total financing was undertaken at an underlying SOFR based variable rate and hedged with SOFR denominated floating-to-fixed interest rate swap(s), entered into on a current starting basis for the Refinancing portion and forward starting basis for the New Capital portion. Denominating the loan and swaps in SOFR will serve PBC well as the 2023 expiration of LIBOR approaches, avoiding the need to address any outstanding LIBOR-denominated debt at a later date.

HJ Sims led the financing implementation process as Structuring Agent and served as Swap Advisor, parallel-tracking completion of conditions precedent, transaction documentation and approval, to complete the financing on the desired timetable. This included successful execution of a bank solicitation process garnering strong bank interest, with multiple competitive proposals, and ultimately a financing meeting the objectives originally established at its outset. Furthermore, this favorable outcome reflected the culmination of several years of collaborative planning by PBC, Sims and the project development team.

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