third sims financing funds continued expansion of redstone village campus

On July 9, 2008, Sims closed a parity tax-exempt bond financing for Redstone Village, a lifecare CCRC opened in 2004 in Huntsville, Alabama, providing funding for the second phase of the community’s expansion, begun in 2007 and financed by Sims as part of a $63,480,000 refunding and expansion tax-exempt bond issue.

The 2008 financing allowed Redstone Village to take advantage of a Certificate of Need for a Specialty Care Assisted Living Facility (SCALF) that had been donated to the company during 2007. The SCALF, consisting of 32 private rooms and related common areas in a stand-alone building, will provide personalized care to Redstone residents and residents of the Huntsville. With the addition of the SCALF, Redstone Village will be able to provide a full continuum to its lifecare residents and to expand its services to the greater community.

Redstone Village - Huntsville, AL

During development of the project, Redstone Village and Greystone Communities, Inc., its development consultant and management company, faced several challenges, including securing bondholder approval for the project (required by the 2007 issue), obtaining a renewal of the Certificate of Need to allow time for design and permitting of the project, and acquiring City approval. In addition, as part of the project, Redstone was obligated to extend its public access road through the campus to an adjoining residential community.

To meet a last-minute City of Huntsville requirement for bonding construction of the road, Redstone was required to obtain a letter-of-credit from a local bank, collateralized by a portion of the construction fund from bond proceeds. As a result, working with Sims and potential bondholders, Redstone agreed to a separate lien, senior to that of the bondholders, for the portion of the financing related to construction of the road.

This financing capped the successful start-up and stabilization of the community and represented the third transaction underwritten by Sims for Redstone Village. The original financing, closed in November 2002 and consisting of $54,385,000 in variable rate, adjustable rate and fixed rate tax-exempt bonds was underwritten by Sims after the last-minute withdrawal of the investment bank initially retained by the company. Sims completed the financing within 60 days of being retained.

Despite the difficult economy at the time of sale, the 2008 bonds were priced favorably, with a 35 year maturity yielding 7.00% and an average coupon of 6.84%. Redstone Village is now successfully positioned to serve its residents and to continue to grow in the future.