Wesley Woods of Newnan – Peachtree City (December 2021)

HJ Sims Partners with Wesley Woods of Newnan – Peachtree City to Refinance Outstanding Bonds and Improve Covenants

“We thoroughly enjoyed working with the team at H.J. Sims led by Tom, Aaron and David.  This was the first time I personally worked through a bond transaction, and I didn’t know what to expect.  The team at H.J. Sims walked me through each step, setting expectations and delivering on their promises.  It was clear that the team at H.J. Sims knew what they were doing and brought us the best possible result.  We couldn’t be more pleased with the outcome.”

– Terry Barcroft, President and CEO, Wesley Woods of Newnan

Wesley Woods at Newnan Logo
Community Entrance of Wesley Woods of Newnan

Partnered Right®

Wesley Woods of Newnan – Peachtree City (the “Community”) is a continuing care retirement community located in Newnan, Georgia. It consists of 100 independent living units, 37 assisted living units, 8 memory care units, and 23 skilled nursing units. The Community is an affiliate of Wesley Woods Senior Living, which manages several other communities throughout Georgia.

HJ Sims originally assisted the Community with its start-up financing in the mid-1990s, and was selected again by Wesley Woods after a competitive RFP process to assist with refinancing its outstanding Series 2016A Bonds.

Structured Right®

HJ Sims assisted the Community in accomplishing its three main goals as part of the 2016A refinancing: (1) taking advantage of historically low interest rates to generate significant cash flow savings; (2) repaying a $1 million subordinate loan from Wesley Woods Senior Living; and (3) improving its existing covenant package.

The Community’s Series 2016A Bonds had a high interest rate of 7.05% with a call date in March 2022, which allowed for a tax-exempt refinancing to occur in December 2021 (90 days in advance of the call date). While a non-rated refinancing would still generate significant cash flow savings in the 2021 interest rate environment, Sims reviewed the Community’s credit rating potential to determine if the Community could further lower its borrowing cost. Sims compared the community’s quantitative and qualitative performance against Fitch Ratings’ new rating criteria and ultimately estimated that the community could receive at least a BB rating from Fitch Ratings. Sims also approached Fitch on behalf of the community and received positive feedback on its rating potential to be in the BB to BB+ range.

Further, to accomplish the subordinate loan repayment without hindering the Community’s cash position, the Community would borrow an additional $1 million in tax-exempt bonds to reimburse itself for prior capital improvements and provide funds for its cottage expansion project. The cash on hand that would have been used to pay for the expansion project could then be used to repay the subordinate loan over the next year.  

Additionally, HJ Sims identified several areas of improvement for the Community’s existing covenant package. These improvements included: (1) testing debt service coverage annually at 1.20x rather than at 1.25x on a quarterly basis and limiting event of default scenarios; (2) lowering the days cash on hand covenant from 150 days to 120 days and removing any event of default scenarios related to the covenant; and (3) easing restrictions on borrowing additional debt, acquisitions/mergers, and transfer of property.

Executed Right®

As part of the Fitch Ratings process, HJ Sims worked with management to prepare for the rating presentation. Ultimately, the Community obtained a BB+ rating, significantly lowering its borrowing cost. The financing included a new covenant package as well as a 5-year call feature with a premium of 104%, down to par in year 9, that improved the Community’s operating and capital structure flexibility.

Financed Right®

On December 2, 2021, HJ Sims closed the $15,145,000 Series 2021 Bonds. The 2046 term bond (the final maturity) carried a 4.00% coupon and a 3.05% yield to the call date (3.53% yield to maturity), significantly lower than the 2016A Bonds’ 7.05% interest rate. The refinancing generated roughly $350,000 in annual savings and $8.5 million in total savings. The refinancing is also expected to generate $5.6 million in NPV savings and 37.9% NPV savings as a percentage of the refunded bonds.

For more information, please contact:

Aaron Rulnick


Tom Bowden


David Saustad


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