Specialty investment bank Ziegler has announced the successful closing of the $30,800,000 Series 2014 Bond financing for Presbyterian Manors, Inc., a long-standing Ziegler client. Presbyterian Manors, Inc. (PMI) was established in 1948, as United Presbyterian Foundation of Kansas (UPFK) as a not for profit corporation. The Series 2014 Bonds were issued for the benefit of an obligated group consisting of PMI and Aberdeen Village, Inc. (AVI), a senior living community located in Olathe, Kansas.
PMI and its parent, Presbyterian Manors of Mid-America, Inc. (PMMA) are headquartered in Wichita, Kansas. PMI and AVI own a total of 17 senior living communities throughout Kansas and Missouri, comprised of 939 nursing beds, 514 assisted living units, and 596 independent living units, all of which are managed by PMMA. In addition, PMI is affiliated with Aberdeen Heights, a new senior living campus located in St. Louis County. Aberdeen Heights and PMMA are not members of the PMI Obligated Group with respect to the Series 2014 Bonds.
The 2014 Bonds totaling $30,800,000 consist of $17,400,000 of fixed-rate Series 2014A Bonds, $5,550,000 of TEMPS-80 Series 2014B-1 Bonds, $4,600,000 of TEMPS-50 Series 2014B-2 Bonds, and $3,250,000 of taxable Series 2014C Bonds. The Series 2014A Bonds were issued as permanent debt, i.e., debt that will be amortized on a level debt service basis during 2019-2049, with a 35-year final maturity. The TEMPS-50, TEMPS-80 and taxable bonds we issued as temporary debt – the debt that will be repaid using entrance fees during the initial fill-up period of the new project described below. The temporary debt was sized so that it can be fully repaid from initial entrance fees once the project reaches 80% occupancy. The taxable bonds were needed for a variety of items including a portion of the project costs, certain issuance costs, and a portion of the funded interest.
The Series 2014 Bonds are being issued to: 1) finance the development of the Phase II addition of 90 Independent Living Units; 2) purchase a new corporate office building and provide for certain renovations and FF&E; 3) fund a Debt Service Reserve Fund for each series of bonds; 4) fund interest on the Phase II project for a period of 19.5 months; 5) fund interest on the Corporate Office Building for a period of 12 months; and 6) pay certain costs of issuance related to the Series 2014 Bonds.
The 2014 Project includes the second phase of the redevelopment of PMI’s Wichita community, as well as the acquisition and renovation of a new corporate office building. The Phase II Project includes the demolition of the former assisted living center and health center and the construction of a building which is expected to include 90 new independent living apartments on the site of the former assisted living center and health center. There will be several models of the new independent living apartments. Over 75% of the independent living units were pre-sold at the time the financing closed. Greystone is serving as co-developer with PMI with respect to the Phase I and Phase II projects. Financing for the first phase of redevelopment at the Wichita campus occurred in 2013 and upon completion the project will reposition the assisted living and nursing service lines while adding memory care units. Construction on these projects is anticipated to be completed in November 2014. PMI has embarked on the redevelopment of its Wichita campus in order to offer superior facilities and services to its residents while positioning itself to compete successfully for years to come. With over 65 years in the senior living industry, PMI has an excellent reputation and name recognition throughout Missouri and Kansas.