HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful negotiation of a three-year funding of a $1,000,000 debt service reserve fund with favorable covenants on behalf of its clients, the Evangelical Lutheran Good Samaritan Society (the Society), the largest not-for-profit provider of senior care and services in the country founded in 1922, and Sanford Health (Sanford), the largest, rural, not-for-profit health care system in the nation and headquartered in South Dakota.
The Society operates skilled nursing facilities (SNF), residential housing for seniors, home and community-based health services,and affordable housing projects in 224 locations across the United States.Sanford operates 45 hospitals and 289 clinics in nine states and three countries, and has 28,000+ employees, including 1,300+ physicians in more than 80 specialty areas of medicine.
Sanford and the Society entered into an agreement to form a joint venture to be managed by the Society, to operate their respective senior and skilled living facilities in the Bismarck-Mandan market and to build a new $28,000,000 replacement skilled nursing facility. The joint venture partners closed one existing, outdated skilled nursing facility and transferred the bed licenses and residents to the new facility. The new facility accommodates 56 transferred skilled nursing residents and operates a transitional care unit for patients.The joint venture owns the newly constructed skilled nursing facility and leases remainingbuildings from the respective joint venture party.
The Society built the replacement SNF using a short-term line of credit, and the joint venture agreement stipulated that $20,470,000 of the costs be reimbursed to the Society.The joint venture partners retained Sims to obtain a long-term, tax-exempt loan secured by a mortgage on the new building and joint venture revenues. Sims conducted a mortgage loan RFP process andconducted an appraisal analysis to confirm sufficient facility value, including acquiring bondholder consent on documents securing the bonds originally issued to finance the buildings.
The team selected a Sioux Falls bank to lead a banking group that originateda $20,470,000 mortgage loan with a 30-year amortization and a 10-year fixed tax-exempt rate of 3.0%. Sims coordinated the timing of necessary TEFRA (The Tax Equity and Fiscal Responsibility Act of 1982) and county board meetings, and the closing of the mortgage loan. Morton County, North Dakota was selected to serve as issuer of the tax exempt mortgage note, and Sims coordinated the retention of bond counsel and the preparation of necessary documents.Sims ultimately negotiateda three-year funding of a $1,000,000 debt service reserve fund with favorable covenants, meeting the needs of its clients.
For Financed Right® solutions, contact Mark Landreville at mlandreville@hjsims.com.
ABOUT HJ SIMS: Founded in 1935 on Wall Street, HJ Sims is a privately held investment bank and wealth management firm with $2.2 billion of assets under management. HJ Sims is one of the country’s oldest underwriters of tax-exempt and taxable bonds, having raised $22 billion for projects throughout the US. The firm is headquartered in Fairfield, Connecticut, with investment banking, private client wealth management and trading nation-wide. Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, is custodian of all client assets. HJ Sims is not affiliated withEvangelical Lutheran Good Samaritan Works or Sanford Health.www.hjsims.com/ourstory. Investments involve risk, including the possible fluctuation of principal. Member FINRA, SIPC. Follow us on LinkedIn, Facebook and Twitter.
