Senior living organizations today are facing many challenges including the current high cost of tax-exempt fixed rate debt, more stringent credit criteria for obtaining or renewing bank letters of credit, the decline in the number of banks providing senior living credit enhancement, depleted organizational balance sheets, low levels of investment earnings leading to unaffordable levels of funded interest during construction, swap contracts with negative mark to market values, and other financial stresses leading to consideration of selling or joint-venturing facilities.

The latest in Cain Brothers’ Strategies in Capital Finance white papers titled “Financing and Debt Restructuring Solutions for the Senior Living Industry Financial Crisis” focuses on finance-oriented solution sets for the many challenges facing senior living organizations today. It is a follow up to a paper published earlier in the year by Cain Brothers that discussed the implications of the simultaneous deterioration in the housing market, the stock market, and the debt market and the resulting material negative impacts on the senior housing industry.

Bill Pomeranz, Managing Director of Cain Brothers, said, “Daunting as these challenges may seem, organizations that act swiftly and thoughtfully to make proactive changes in recognition of their changed debt-related circumstances will be in the best position to survive and continue to meet the needs of their residents over the long term. Many relatively new senior living facilities are experiencing financial stress, and many others are likely moving in the same direction without fully understanding their potential vulnerability. At Cain Brothers, we believe that the rapid decline in the banking environment and the related difficulties of financing senior living facilities may be long lasting and that alternative approaches to coping with tight credit markets and accessing capital are needed going forward.”

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Please visit the Research page on our website to access and download this report or email strategies61@cainbrothers.com to request a printed copy.

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Cain Brothers is an investment banking firm that focuses exclusively on the health care industry. Our clients include providers, payors, medical device and equipment companies, information technology companies, outsourcing companies, and financial sponsors. 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, San Francisco, Atlanta, Indianapolis, Los Angeles, Sarasota, and St. Louis, 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:

SAN FRANCISCO
Bill Pomeranz, Managing Director
bpomeranz@cainbrothers.com
415-962-2954

LOS ANGELES
Kathy Kirchhoff, Senior Vice President
kkirchhoff@cainbrothers.com
562-889-9119

CHICAGO
Amy Hayman, Managing Director
ahayman@cainbrothers.com
312-604-0578

ST. LOUIS
Joe Mulligan, Managing Director
jmulligan@cainbrothers.com
314-800-0441

NEW YORK
Matt Goldreich, Managing Director
mgoldreich@cainbrothers.com
212-981-6946

Scott James, Managing Director
sjames@cainbrothers.com
212-981-6943