Cain Brothers, the health care investment banking firm, announced today that it successfully closed the largest ever tax-exempt bond issue for a nonprofit continuing care retirement community.

On behalf of Pacific Retirement Services, Inc. (PRS), the Medford, Oregon based nonprofit developer-owner of CCRCs, and its start-up Mirabella CCRC located in Seattle, Washington, Cain Brothers sold $256,750,000 variable rate bonds in two issues ($250,745,000 Series A Tax-Exempt and $6,000,000 Series B Taxable) through the Washington State Housing Finance Commission.

When completed, the new Mirabella CCRC is expected to include approximately 289 independent living apartments, 32 assisted living units, 22 special care units, and 22 skilled nursing units. PRS will provide management services to Mirabella and its residents. The Mirabella project is located in the heart of downtown Seattle’s South Lake Union redevelopment district. The project reflects a growing trend towards urban high-rise CCRCs in cities with vibrant downtown environments where residents can be in walking distance of cultural activities, entertainment, shopping, and other services. Site work on the CCRC project began in August 2006, and occupancy is expected by October 2008.

Cain Brothers was the sole underwriter of the bonds, which were backed by a letter of credit issued by HSH Nordbank AG and were rated A/A-1 by Standard & Poor’s. The two bond issues mature in 2012 and 2036. As part of the overall transaction, Mirabella (the actual borrower) will enter into an interest rate swap so that it pays a fixed rate of interest and the swap counterparty pays a variable rate of interest. The transaction was done on a stand-alone basis without cash support from PRS. HSH Nordbank AG provided a development line of credit to Mirabella.

PRS is one of the fastest growing nonprofit CCRC developer-owners in the industry. In the last decade it has opened new facilities in Saratoga and Davis, California, and has also acquired, renovated, and expanded facilities in Fort Worth, Texas, and in Eugene and Portland, Oregon. Tom Becker, CEO of Pacific Retirement Services said, “This is a very exciting day for us and the people that we will be serving in Seattle when the project is up and running. We have been working on the project’s planning and financing since 2004, and we are grateful for Cain Brothers’ strategic insights as the planning process moved along. We are now looking forward to fulfilling the demand for these kinds of facilities and the integrated services they will offer to the Seattle community.”

Mike Fitzsimons, Cain Brothers Head of Bond Underwriting and Sales said, “It was a pleasure for us to work with the managers and staffs of PRS and the Washington State Housing Finance Commission on this very important bond issue. The bond purchasers responded favorably to the Mirabella CCRC story, PRS’s management capabilities, and the financing structure, so the transaction went smoothly once all the pieces were in place.”

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Cain Brothers is an investment banking firm that focuses exclusively on the health care industry. Its clients include providers, payors, medical device and equipment companies, information technology companies, and providers of outsourcing solutions to the health care industry. The firm has one of the largest teams of experienced bankers and traders on Wall Street dedicated to the health care industry. Operating out of offices in New York, Chicago, Houston, Indianapolis, San Francisco, and Sarasota, Cain Brothers creates custom-tailored, market-based solutions for the many strategic, financial, and operating challenges facing its clients. Cain Brothers’ venture capital affiliates, Health Enterprise Partners and CB Health Ventures, invest capital in fast-growing health care service and information technology companies.

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Contacts:

Joan Annett
415-962-2954
jannett@cainbrothers.com

Mike Fitzsimons
212-981-6948
mfitzsimons@cainbrothers.com

Bill Pomeranz
415-962-2954
wpomeranz@cainbrothers.com

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This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such jurisdiction.