Asbury Maryland: An Exclusive Investment Opportunity

 

 

$85,070,000*
CITY OF GAITHERSBURG (MARYLAND)
Economic Development Project and Refunding Revenue Bonds
(Asbury Maryland Obligated Group)
Series 2018A

HJ Sims is pleased to serve as underwriter for the upcoming issue of these tax-exempt economic development project and refunding revenue bonds for the Asbury Maryland Obligated Group (the “Obligated Group”), which consists of the Maryland Facilities of Asbury Atlantic, Inc (“Asbury Atlantic”). The sole member of Asbury Atlantic is Asbury Communities, Inc. (“AComm”), which was incorporated in 1994 for the purpose of providing executive and comprehensive administration functions, as well as policy development and overall planning guidance to its supported organizations. The Maryland Facilities consist of Asbury Methodist Village, a continuing care retirement community located on approximately 130 acres in Gaithersburg, Montgomery County, Maryland, and home to approximately 1,300 total residents and Asbury Solomons Island, a continuing care retirement community located on approximately 58 acres in Solomons, Calvert County, Maryland, providing several levels of care for approximately 470 residents.

About the Bonds

  • Rating: “BBB” (Fitch/Stable Outlook)
  • Exempt from Federal Income Tax and State of Maryland Income Tax
  • Denominations: $5,000
  • Interest Payment Dates: January 1 and July 1, commencing January 1, 2019
  • Principal Payment Dates: January 1 and July 1, commencing January 1, 2023
  • Final Maturity: January 1, 2036

Use of Proceeds

  • Refund all of the outstanding principal amount of: The City of Gaithersburg (Maryland) Economic Development Revenue Refunding Bonds (Asbury Maryland Obligated Group), Series 2006A
  • Fund a Debt Service Reserve Fund for the Series 2018A Bonds
  • Finance or refinance certain capital improvements to the Asbury Methodist Village
  • Pay certain costs of issuance of the Series 2018A Bonds and/or other related costs

Security

  • Interest in the Maryland Assets of Asbury Atlantic
  • Interest in the Gross Revenues of the Obligated Group (including Entrance Fees and Accounts Receivable)
  • Lien on the Real Property constituting the Maryland Facilities and other personal property of the Obligated Group
  • Operating Support Agreement from AComm, which may be terminated if the underlying rating for the Asbury Maryland Obligated Group is determined to be Investment Grade and upon the satisfaction of other conditions set forth in the Master Indenture

Key Financial Covenants

  • Debt Service Coverage Ratio of 1.20x (measured annually)
  • Liquidity Covenant of 110 Days Cash on Hand (measured semi-annually)

Other Indebtedness (Parity with Series 2018A Bonds)

  • Series 2009 Bonds: approximately $19.45 million currently outstanding and January 1, 2023 Final Maturity
  • Series 2018 SunTrust Loan: approximately $13.5 million outstanding; issued to pay for Interest Rate Swap Termination Fee of approximately $14.2 million; January 1, 2022 Final Maturity
  • Series 2018B Bonds: Redemption of the Series 2014 Bonds via an exchange for the purchase of the Series 2018B Bonds; approximately $13.645 million expected to remain outstanding after the exchange; January 1, 2027 Final Maturity

We are currently accepting indications of interest for these tax-exempt refunding revenue bonds with an expected pricing week of September 10, 2018 and anticipated settlement week of October 1, 2018. For more information including risks, please read the Preliminary Official Statement in its entirety. If you have interest in purchasing these Series 2018A  bonds from this new issue, please contact your HJ Sims financial advisor as soon as possible or call 877.577.3365.

*Subject to change

No dealer, broker, salesperson, or other person has been authorized to give any information or to make any representation other than those contained in the Preliminary Official Statement, and, if given or made, such other information or representation should not be relied upon as having been authorized by the Issuer, the Borrower, or the Underwriters. The information set forth herein has been obtained from the Issuer, Borrower, and other sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not construed as a representation of, the Underwriters. The information contained herein is subject to change without notice. Under no circumstances shall this constitute an offer to sell or solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offering or solicitation will be made only to investors pursuant to the Preliminary Official Statement, which should be read in its entirety. Investments involve risk including the possible loss of principal. HJ Sims is a member of FINRA and SIPC and is not affiliated with Legacy at Asbury Maryland.

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