Sims Converts FFT Senior Communities Bonds From Fixed Rate to Variable Rate Mode With an Initial Weekly Rate of 0.30%

On May 13, 2010, Herbert J. Sims & Co. remarketed $16.575 million of F.F.T. Senior Communities' ("FFT") Series 2000B bonds, which were converted from a long-term interest rate mode to a weekly mode. Sponsored by the FF Thompson Health System, Inc., FFT owns and operates a Canandaigua, New York continuing care retirement community known as Ferris Hills at West Lake. The community consists of 84 independent living units and 48 enriched housing units. The start-up construction of the community was originally financed by Sims with $23.855 million of Series 2000 tax-exempt bonds. The bonds were enhanced with a 5-year KBC Bank N.V. letter of credit. In December 2001, $5.3 million of bonds were paid in full. In 2005, KBC Bank renewed the letter of credit on the outstanding Series 2000B bonds for another 5-year term ending May 13, 2010, and the outstanding bonds were remarketed with a 5-year term.

Ferris Hills at West Lake ~ Canandaigua, NY

With tighter lending constraints in early 2010, KBC Bank is considering exiting the senior living industry in the United States. Thus, FFT and Sims approached KBC Bank to discuss further options. After several negotiations and despite the stringent economic environment, KBC Bank agreed to extend the letter of credit for two years. The extension included several favorable terms for FFT: no recourse to the sponsor, relaxed covenants, pricing incentives for improved occupancy levels and conversion from long-term interest rate mode to variable weekly rate mode. The conversion provides significant debt service savings, given the currently low variable rates in the tax-exempt market. The bonds are rated Aa3/A-1 by Moody's Investor Services. Despite concerns over how the turmoil in Europe would affect European banks, Sims set the initial variable rate at 0.30%, or at the level of the SIFMA index.