Herbert J. Sims & Co., Inc.

Brookhaven at Lexington

combining multiple sources of financings to expand and renovate a campus

Brookhaven at Lexington engaged Sims to finance an expansion and renovation project whereby Brookhaven will add 48 independent living units and 11 new assisted living units, will modernize its wellness center with the addition of a fitness center and indoor pool, and will enhance the health center and common areas.

Brookhaven at Lexington

Brookhaven took on an additional $33 million in debt to finance the project, while maintaining its investment grade rating of BBB. Approximately $21 million of the debt was structured as a construction loan with a variable rate which is expected to be repaid within three years of closing from entrance fee proceeds. The remainder, approximately $12 million, was structured with a combination of letter of credit enhanced variable rate bonds and Radian insured, fixed rate bonds. In addition, Brookhaven could refinance its outstanding debt, realize significant savings and benefit from economies of scale in that there were no real additional financing costs resulting from the addition of the refinancing. The $12 million refinancing was also structured with a combination of variable and fixed rate debt and yielded approximately $120,000 in annual savings and net present value savings of $926,000, or 7.95% of refunded bonds.

To hedge against rising variable rates, Sims helped Brookhaven enter into an interest rate cap contract whereby Brookhaven would not pay more than 5% on the variable rates. This cap allows Brookhaven to take advantage of low variable interest rates but not be exposed if rates increase significantly over time.

Jim Freehling, Chief Executive Officer of Brookhaven, commented, “The Herbert J. Sims staff assisted us in coming up with an extremely attractive financing package for our expansion and renovation project. The advice was excellent and our Board of Trustees was impressed with the savings” [on the refinancing].