Senior Housing Finance Activity: Kindred, Lancaster Pollard, Greystone, More

Kindred Healthcare Expands Credit Capacity by $200 Million

Kindred Healthcare Inc. (NYSE:KND) announced the successful completion of amendments to increase its senior secured term loan facility by $100 million, and expand the borrowing capacity under its senior secured asset-based revolving credit agreement by the same amount.

Net proceeds of the additional term loan borrowings, issued at 97.5%, were used to pay down a portion of the outstanding balance under the revolving credit facility. The aggregate amount currently outstanding under the term loan facility is $791 million.

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In connection with the $100 million expansion of the borrowing capacity under its revolving credit, Kindred modified its accounts receivable borrowing base, allowing the company to more easily access the full amount of the available credit. Kindred will have $450 million of unused borrowing capacity under the revolving credit facility.

Other terms of the term loan and revolving credit facilities were unchanged.

“These amendments create an additional $200 million of credit capacity to enhance our ability to expand our continuum of post-acute care services,” CEO Paul J. Diaz said in a statement. “We believe this additional credit capacity along with our ability to generate strong free cash flows provides us with a great opportunity to accelerate our cluster market strategy, further invest in our home health and hospice operations and expand our higher margin businesses.”

Lancaster Pollard Closes $32.2 Million of Senior Housing Loans

  • Lancaster Pollard recently closed on a $7 million HUD LEAN mortgage loan for Family Health & Rehabilitation Center, a 72-bed nursing facility in Wichita, Kan. The loan, insured by the FHA Section 232/223(f) program, was used to refinance the property to take advantage of low interest rates, with a 35-year term and amortization. In addition, the borrower was able to use loan proceeds to finance approximately $600,000 in owner-elective repairs to the facility, including the expansion of its therapy room. Bill Wilson, out of Lancaster Pollard’s Lawrence, Kan. office, was the lead banker on the transaction.
  • The Inn at Renaissance Village, a 101-unit assisted living and memory care facility in Middletown, Ohio, recently closed on a $9.9 million refinance of its existing construction debt held by a bank. Lancaster Pollard, led by Kass Matt out of the firm’s headquarters in Columbus, Ohio, used the FHA Sec. 232/223(f) program to complete the transaction, allowing the borrower to eliminate the renewal risk and recourse associated with bank financing. The refinancing reduced the interest rate by over 4 percentage points and will generate annual debt service savings of $325,000.
  • Lancaster Pollard recently closed on two loans insured by the FHA Sec. 232/223(a)(7) program totaling $11.7 million. The loans will refinance two of Provider Services’ skilled nursing facilities in Ohio—Riverview Pointe and Dayspring Care Center. The refinancing lowered the interest rates significantly and will generate over $200,000 in combined annual debt service savings. Kass Matt, out of the firm’s headquarters in Columbus, Ohio, led the transaction.
  • Lancaster Pollard recently announced the refinancing of West Ridge Care Center, a skilled nursing facility in Cedar Rapids, Iowa, using the FHA Sec. 232/223(a7) program. The $3.6 million loan has a low interest rate and a 31-year term that will allow the borrower to benefit from nearly $94,000 in annual debt service savings. Quintin Harris, Lancaster Pollard’s healthcare banker for Iowa, spearheaded the transaction.

Regal Lifestyle Communities Prices $138.8 million IPO

Regal Lifestyle Communities Inc. announced on Friday the filing for a final prospectus for its initial public offering of 13,879,700 common shares with the securities commissions of all provinces and territories of Canada. The common shares will be issued at a price of $10.00 per common share and are expected to provide shareholders with an annual yield of 7.0%; the offering is expected to yield a gross proceeds of approximately $138.8 million. 

A syndicate of underwriters co-led by CIBC and BMO Capital Markets is underwriting the offering. Regal has granted the underwriters an over-allotment option to purchase up to an additional 2,081,955 common shares which, if exercised in full, would increase the total gross proceeds of the offering to approximately $159.6 million.

The offering is expected to close on Oct. 16, 2012. Concurrent with the completion of the IPO, Regal Lifestyle Communities will acquire a 10-property portfolio of retirement communities offering independent living and assisted living that has more than 1,400 units.

The Toronto Stock Exchange has conditionally approved the listing of the common shares under the symbol “RLC.”

Cambridge Provides $24.2 Million Loan for Chicago Senior Apartments

Cambridge Realty Capital Companies has provided a $24.2 million FHA-insured HUD mortgage loan to refinance Maple Pointe Apartments, a 343-unit senior apartment complex in Chicago, Ill.

The fully-amortized, 35-year term loan was arranged using HUD’s Section 232/223(a)(7) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in HUD loans.

Greystone Expands Bridge Loan Services to Healthcare Sector

Greystone, a national provider of multifamily and commercial mortgage loans, announced on Thursday it was launching a healthcare bridge loan service that will be overseen by Steve Germano, managing director of the Greystone bridge loan platform.

The bridge loan program enables multifamily and now healthcare properties to quickly and readily obtain short-term financing—up to $30 million or more—during acquisition, stabilization, rehabilitation, and repositioning initiatives. 

“The availability and accessibility of bridge loans for healthcare and multifamily properties is vital for owners, property operators and intermediaries who need interim financing as they plan for a lengthier period of time,” said Germano. “Both sectors have unique challenges and requirements, and with Greystone’s successful history originating, underwriting, and servicing loans across multiple segments clients can be confident that their needs are being met, both in the short and long-term.”

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