Plantation Village (November 2021)

HJ Sims Partners with Plantation Village to Facilitate Approximately $65 Million Hybrid Expansion Financing involving Short-Term and Intermediate-Term Draw Down Bank Debt and Long-Term Fixed Rate Bonds

“While Plantation Village had a longtime banking partner, it had not yet issued any public bonds. Melissa, Aaron and the rest of the HJ Sims team expertly navigated us through the entire process. The team was very responsive to answering any questions that arose and explained the process every step of the way. They worked closely with our board to structure a deal that was best for the future of our community. Their efforts paid off in a very successful financing of our project. I couldn’t imagine having a better team on our side.”

– Cara Arrans, Director of Accounting, Plantation Village, a Life Care Services managed community

Plantation Village Logo
Rendering of Magnolia Walk at Plantation Village

Partnered Right®

Plantation Village is an existing life plan community, which opened in 1988 and consists of approximately 2 independent living cottages, 66 independent living duplex homes, 48 independent living villas and 129 independent living apartments and related common amenities (the “Existing Community”).  Since opening in 1988, assisted and skilled nursing services for the residents have been provided through a transfer agreement between Plantation Village and Cornelia Nixon Davis, Inc., which operates The Davis Community, a non-related healthcare provider adjacent to the Existing Community. Plantation Village is located on approximately 56 acres in Wilmington, North Carolina. 

HJ Sims first began working with Plantation Village to secure financing for a prior expansion in 2013.

To continue its success and grow for future generations, Plantation Village engaged Sims to secure financing to renovate existing common areas and auditorium and add new amenity spaces including: indoor and outdoor dining areas, a game room, a meeting room, a cinema, a dog park, community gardens, walking paths, and an arts studio. In addition, Plantation Village is adding 44 new independent living apartments in four apartment buildings (the “Project’) and began converting priority deposits for the Project to Entrance Fee Deposits in April 2021; reaching 70% presales in October 2021.

Structured Right®

While Plantation Village did enjoy a good relationship with its existing lender, the board and management felt it was necessary to evaluate all potential opportunities with any bank financing of the Project. HJ Sims conducted a full solicitation of local, regional and national banks active in the senior living industry, which garnered great interest – in no small part due to the excellent operations and occupancy of Plantation Village. 

HJ Sims worked closely with the board and management of Plantation Village, running multiple financing scenarios analyzing all bond, hybrid bank and bond and all fixed rate bond transactions utilizing varying amounts of the projected initial entrance fees for the Project. As Plantation Village’s master plan does include two future phases that further develops the Existing Community, it was important to ensure flexibility and debt capacity while also balancing deleveraging and minimizing interest expense. Ultimately, Plantation Village settled on a plan of finance that including a short-term draw down bank loan that would utilize approximately 80% of the initial entrance fees of the Project to deleverage, an intermediate-term draw down bank loan, and long-term fixed rate bonds. All series were to be tax-exempt and issued by the North Carolina Medical Care Commission.

Executed Right®

This financing was the first financing for the Plantation Village team utilizing tax-exempt debt of any kind, the first time they utilized bonds offered in the public markets, and the first time working with Fitch Ratings to obtain a rating on their indebtedness. The HJ Sims team worked closely with the board and management of Plantation Village as well as their counsel to walk through the ratings process, the deal process and the documentation involved in the hybrid bank-bond financing.  This process included board education on master trust indenture structures, the Fitch ratings process, the bank and the bond markets, and the tax-exempt bond issuance process. Ultimately, Plantation Village achieved a Fitch “BBB” rating (Stable Outlook) for its first tax-exempt bond issuance even as the financing would increase their outstanding debt balance nearly six times over its existing indebtedness. As the presales process was increasingly successful and the construction market continued its high pricing and volatility, it became apparent that the bond financing process would need to be accelerated ahead of prior expectations to take advantage of the historically low interest rate environment and execute a guaranteed maximum price contract for the Project.

Financed Right®

HJ Sims successfully integrated the needs of the banks and bond investors with those of Plantation Village resulting in an efficient $64,656,000 financing structure of which only $32,740,000 was tax-exempt fixed rate bonds with the balance being distributed between $17,865,000 of short-term draw down bank debt and $14,051,000 of intermediate-term draw down bank debt. HJ Sims was able to achieve an excellent execution with a fixed rate of 1.600% on the short-term bank debt, 2.150% on the intermediate-term bank debt, and pricing 97 basis points off of MMD for the fixed rate bonds (4.000% to yield 2.350% in 2041 and 4.000% to yield 2.550% in 2052).  The hybrid bond and bank structure created maximum efficiency for Plantation Village as the final amount of funded interest was approximately 70% of what it would have been in a full fixed rate bond scenario, while lifetime interest expense was approximately 89% of what it would have been in a full fixed rate bond scenario. 

For more information, please contact:

Melissa Messina


Aaron Rulnick


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