CINCINNATI, OHIO — HJ Sims has negotiated new band and bond terms for Maple Knoll Communities (MKC), a non-profit operator based in Cincinnati.
MKC sought to extend its bank term, reduce its interest rate expense, and reduce its liquidity covenant.
MKC owns and operates the retirement communities of Maple Knoll Village and The Knolls of Oxford, as well as Maple Knoll Outreach Services for Seniors, three affordable HUD Senior Living Residences, Village Home Health and Hospice, WMKV 89.3 and 89.9 FM radio station, a Montessori Child Center and the Hemsworth Wellness Center.
Sims has served as MKC’s investment banker for approximately 25 years, helping to finance expansions to both MKC campuses since 1993, and providing financing solutions through 2007 with a syndicate of banks. In 2010, Sims served as financial advisor to MKC to extend a portion of its letters of credit, including a reorganization of the banking syndicate.
In order to facilitate repayment to the banking syndicate, Sims secured alternative financing for MKC. The 2013 financing included $30.9 million of non-rated, fixed-rate bonds to repay the banks exiting the syndicate and to lock into longer-term and stable capital; $36 million of a combination of direct bank purchased bonds; and a taxable loan to secure a lower cost of capital.
MKC’s lead bank, Huntington Bank, agreed to extend the loan term, lower its fee and swap rate, and reduce the liquidity covenant. MaineSource Bank was also brough on as a partner for Huntington on the loan.
The new terms included an extended bank term and swap to July 2023, a 20-basis-point reduction in the bank fee, a more than 60-basis-point reduction in its swap fee, and a reduction to MKC’s liquidity covenant. Sims secured approval from the 2013 fixed-rate bondholders to amend the 2013 bond documents to lower the liquidity covenant from 150 to 120 days cash on hand.