Hebrew Rehabilitation Center

hebrew rehabilitation center 2007 refinancing

Hebrew SeniorLife is developing NewBridge on the Charles (“NewBridge”), a planned continuing care retirement community to be located in Dedham, Massachusetts. NewBridge will include 256 housing units, 91 assistance-in-living apartments, and a 268-bed health care center. NewBridge will lease spaces in which its affiliate, Hebrew Rehabilitation Center (“HRC”), will operate 220 beds of its chronic care hospital beds.

Located in Roslindale, Massachusetts, HRC provides quality health care, services, and nationally renowned research programs dedicated to gerontology. In addition to its programs and services, HRC also operates 675 chronic care hospital beds and a 60-bed skilled nursing unit.

In order for HRC to operate the 220 beds on the NewBridge campus, a refinancing of HRC’s outstanding debt was required to remove the 220 beds and associate revenues from the security pledged to the HRC bondholders. The refinancing had to close before closing of the NewBridge bond issue, which would occur in December 2007. Since the bonds were callable in 2008, an advance refunding was required. However, a portion of the outstanding debt had previously advance refunded HRC’s original debt, making them ineligible for advance refunding with tax-exempt bonds. Therefore, that debt was refunded with taxable bonds.

To prepare for the NewBridge financing, the HRC refinancing closed in November 2007. The bond issue included a combination of tax-exempt and taxable variable rate bonds totaling $17,175,000. A 7-year letter of credit was provided to enhance the issue. HRC also locked in a SIFMA-based interest rate swap on the tax-exempt portion, which resulted in a 3.91% all-in rate including letter of credit and remarketing fees.

Sims expects the NewBridge financing to close in December 2007, in what will be the largest taxexempt bond issuance for a CCRC in history.