Ziegler Closes $125,000,000 Financing For HumanGood California

CHICAGO, Oct. 30, 2020 /PRNewswire-PRWeb/ -- Ziegler, a specialty investment bank, is pleased to announce the successful closing of $125,000,000 of bank capital, placed with Washington Federal Bank, for the HumanGood California Obligated Group (the "Obligated Group").

The transaction is comprised of:

• $15,480,000 Series 2020A Revenue and Refunding Bonds (the "Series 2020A Bonds"), refinancing an existing tax-exempt bank placement;
• $64,765,000 Taxable Revenue and Refunding Bonds (the "Series 2020B Bonds"), a Cinderella refinancing of two fixed rate tax-exempt issues;
• $33,755,000 Taxable Term Loan (the "Series 2020 Taxable Term Loan"), new money for various uses; and
• $11,000,000 Taxable Revolving Line of Credit (the "2020 Revolving Line of Credit") (together, the "Series 2020 Bonds").

HumanGood owns and/or operates 21 continuing care retirement, or life plan, communities and 95 affordable housing communities in California, Washington, Arizona, Nevada, Idaho, Pennsylvania and Delaware.

In 2019, HumanGood formed its California Obligated Group, which brought together into a single borrowing entity HumanGood NorCal (fka American Baptist Homes of the West or ABHOW), HumanGood SoCal (fka be.group/Southern California Presbyterian Homes) and HumanGood Fresno (fka Terraces of San Joaquin Gardens). The Obligated Group owns and operates 14 continuing care retirement communities throughout California, consisting of 2,185 residential living apartments, 474 assisted living apartments, 160 memory support suites and 659 skilled nursing beds (a total of 3,478 units/beds).

Proceeds of the Series 2020A Bonds, along with other available funds, will be used to refinance the Series 2012 private placement. The Series 2020A Bonds have a commitment period of 16 years, matching the existing maturity of the Series 2012 private placement, and they pay variable rate interest based on 79% of 1-Month LIBOR plus a bank spread. The Obligated Group has entered into an interest rate cap with a strike price of 2.4% to hedge rate risk on the Series 2020A Bonds.

Proceeds of the Series 2020B Bonds, along with other available funds, will be used to advance refund both the existing Series 2012A and a portion of the 2013A Bonds using a "Cinderella" structure. The 2020B Bonds carry a taxable interest rate up to the conversion period (90 days prior to the call date), at which point the Bonds will convert to tax-exempt. The Series 2020B Bonds have a commitment period of 15 years, and pay variable rate interest based on 1-Month LIBOR plus a bank spread. The Obligated Group has entered into an approximately 2-year interest rate cap with a strike price of 1.6% effective during the taxable period, and a forward-starting, 13-year fixed-rate swap at 0.768% effective during the tax-exempt period.

Proceeds of the Series 2020 Taxable Loan will: (i) fund various campus improvements across the Obligated Group communities and (ii) refinance a portion of the Series 2013A Bonds. The Series 2020 Taxable Term Loan has a commitment period of 15 years and is structured as a draw-down loan for the first 24 months. The 2020 Taxable Term Loan pays variable rate interest based on 1-Month LIBOR plus a bank spread. The Obligated Group has entered into a forward-starting, 13-year fixed-rate swap contract at 0.996% beginning after the 24-month draw period, through the remainder of the commitment period.

Proceeds of the 2020 Revolving Line of Credit will be used to fund future capital projects as needed. The Series 2020 Line of Credit pays variable rate interest based on 1-Month LIBOR plus a bank spread on the amount drawn.

Andy McDonald, HumanGood's Chief Financial Officer, commented: "We couldn't be more thrilled with the outcome of this financing, it has been a home run for HumanGood in terms of gaining flexible access to additional capital at historically low interest rates, refinancing existing debt to realize substantial savings and strengthening and expanding our partnership with Washington Federal Bank. The Ziegler team were invaluable advisors in helping us strategize and implement a complex financing structure which included among other things a "Cinderella financing" component, a revolving loan, and the utilization of interest rate swaps and caps. In a year of such unprecedented challenges and uncertainty, this financing will help propel HumanGood forward financially and strategically while further optimizing our capital structure."

Mary Muñoz, Senior Managing Director, Ziegler Senior Living Finance stated, "Over our 21-year relationship with HumanGood, its obligated groups have gravitated toward a predominantly institutional fixed rate capital structure through various redevelopment projects." Muñoz continued, "This transaction presented a perfect time to add some bank capital to the capital structure at near record low swap rates and cap costs. Bank capital is also the perfect structure for so-called 'Cinderella' taxable refinancings that convert to tax-exempt, since the 2017 Tax Act eliminated advance refundings, or tax-exempt refinancings in advance of a bond call date. We could not be happier for HumanGood and the attractive terms it was able to achieve with its new partner, Washington Federal Bank."

Ziegler is one of the nation's leading underwriters of financing for not-for-profit senior living providers. Ziegler offers creative, tailored solutions to its senior living clientele, including investment banking, financial risk management, merger and acquisition services, seed capital, FHA/HUD, capital and strategic planning as well as senior living research, education, and communication. For more information about Ziegler, please visit us at http://www.ziegler.com.

About Ziegler:

Ziegler is a privately held, national boutique investment bank, capital markets and proprietary investments firm. It has a unique focus on healthcare, senior living and education sectors, as well as general municipal and structured finance. Headquartered in Chicago with regional and branch offices throughout the U.S., Ziegler provides its clients with capital raising, strategic advisory services, fixed income sales, underwriting and trading as well as Ziegler Credit, Surveillance and Analytics. To learn more, visit http://www.ziegler.com.

Certain comments in this news release represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. This client's experience may not be representative of the experience of other clients, nor is it indicative of future performance or success. The forward-looking statements are subject to a number of risks and uncertainties, in particular, the overall financial health of the securities industry, the strength of the healthcare sector of the U.S. economy and the municipal securities marketplace, the ability of the Company to underwrite and distribute securities, the market value of mutual fund portfolios and separate account portfolios advised by the Company, the volume of sales by its retail brokers, the outcome of pending litigation, and the ability to attract and retain qualified employees.

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SOURCE Ziegler