| Hoffman SummerWood Community |
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refinancing and expanding your community to increase operating efficiencies, ease covenants and lower fees description Hebrew Life Choices, Inc. (“Life Choices”) owns and operates a 66-unit community, which provides independent living and supportive services, known as the Hoffman SummerWood Community (“SummerWood”) in West Hartford, Connecticut. The parent company of Life Choices is Hebrew Health Care, Inc. (“HHC”) which provides health care and residential services primarily to older adults in the greater Hartford area. Life Choices is also affiliated with the Hebrew Home and Hospital, Inc., which was founded in 1901, and consists of 289 skilled nursing beds and a 45-bed chronic disease hospital. Through its other affiliates, HHC provides home and community based services and has established a foundation to support is various programs, services and constituents.
 Hoffman SummerWood Community - West Hartford, CT In November 2007, Sims closed a $17,055,000 bond issue to: (a) finance an addition of 42 new independent living units, a meeting room and an expansion and renovation of the existing dining room and (b) refinance the outstanding bonds. challenge SummerWood opened in 2001 and has experienced approximately 98% occupancy since 2004. SummerWood has also developed a growing wait list. Despite the consistently high occupancy, given the size of the initial community, SummerWood was not able to maximize its operating efficiencies and cash flow. In addition, while HHC and its affiliates are not obligors on the SummerWood bonds, Management and the Board of HHC and Life Choices look to SummerWood to generate excess cash flow that can be transferred to HHC to support its affiliated entities. solution FSims worked with Management of HHC and the Life Choices Board to clearly define the objectives of the financing beyond just expanding the community. Prior to the financing, Sims helped negotiate new terms with the issuing authority and the letter of credit bank to allow for the transfer of funds (in excess of an agreed upon level of days cash on hand) to HHC as well as the release of funds held by the Trustee under the previous bond issue. implementation TD Banknorth provided a five-year letter of credit to finance the expansion and refinance the outstanding bonds. The new terms under both the bank and bond documents allowed for the transfer of excess cash to HHC as well as more flexible covenants. Sims also negotiated a reduction in the annual letter of credit fee by 35 basis points to 0.75% with no upfront fee. result Life Choices issued $17.055 million of tax-exempt letter of credit enhanced variable rate bonds. In addition, the financing resulted in the release of over $1.7 million of funds to Life Choices that were held by the Trustee under the previous bond issue. Since these funds are no longer required under the new bond issue, Life Choices does not have any investment restrictions and can now generate a higher yield on the investment of these funds and pay down a portion of its outstanding line of credit. Sims was able to work closely with HHC and the Life Choices Board to clearly identify the objectives of the financing and to implement the financing to realize these goals that will not only benefit the residents of SummerWood, but benefit HHC and its mission as a whole. “Hebrew Health Care has been working with Herbert J. Sims since 1985 when they were an integral part of the financing team providing for the construction of a 165,000 square foot replacement facility for the existing Hebrew Home and Hospital. We have since returned to the Sims Organization for assistance in four separate and very successful financing endeavors. Their guidance through each of these undertakings has proven to be invaluable.”
David Houle |
