Series 2022AB Taxable Forward Delivery Private Placement Episcopal Communities & Services for Seniors
August 9, 2021
KeyBanc Capital Markets served as Placement Agent to Episcopal Communities & Services for Seniors in the issuance of its Series 2022A and 2022B Bonds to refund its Series 2012 ECS Bonds and Series 2014A MonteCedro Bonds. Cain Brothers, a division of KeyBanc Capital Markets, identified the opportunity and coordinated the execution through the KBCM taxable private placement desk. This transaction highlights the breadth, creativity and synergy of the Cain Brothers/KeyBanc Capital Markets platform. ECS is one of the first not-for-profit Life Plan Community organizations to access the taxable private placement market. The transaction structure provides ECS with a flexible capital solution which utilizes a taxable private placement with a forward delivery closing to reduce costs of issuance and negative arbitrage associated with the forward call dates on the prior bonds in May 2022 and November 2022. The chosen structure eliminated the requirement of a conduit issuer and any public approvals. KBCM executed the transaction in under four months, including contemporizing the Master Trust Indenture. The updated MTI includes a favorable covenant and mortgage-free security package for ECS while creating a new corporate structure including MonteCedro in the Obligated Group upon closing of the transaction in 2022. The Bonds priced with a weighted average coupon below 3.00% and resulted in net present value savings of more than $27.9 million, including release of the debt service reserve funds and elimination of a Foundation guaranty. The $90.285 million of Bonds was split in two series:
- Series 2022A Bonds: $52.495 million of Senior Secured Bonds priced at a coupon of 3.04% with a forward delivery funding in May 2022. The Bonds have a 14.6-year weighted average life and final maturity of May 2047.
- Series 2022B Bonds: $37.790 million of Senior Secured Bonds priced at a coupon of 2.89% with a forward delivery delayed funding in November 2022. The Bonds have a 12.7-year weighted average life and final maturity of November 2044.
ECS is a California nonprofit corporation and 501(c)(3) organization that owns and operates Life Plan Communities providing residential living, assisted living, memory care and skilled nursing care in communities known as The Canterbury, located in Rancho Palos Verdes, California (Los Angeles County), which opened in 1983, and The Covington, located in Aliso Viejo, California (Orange County), which opened in 2004. MonteCedro is a California nonprofit corporation and 501(c)(3) organization that owns and operates a Life Plan Community providing residential living and memory care in a community known as MonteCedro, located in Altadena, California (Los Angeles County), which opened in 2015. In early 2021, Twelve Oaks Senior Living affiliated into the ECS family of communities with ECS planning a substantial redevelopment and expansion of its campus. ECS expresses its heritage of and passion for providing affordable senior housing through two programs:
- As Managing General Partner of Casa de los Amigos, L.P.; a 136-unit apartment complex for low-income residents located in Redondo Beach, California.
- As advisor to The Episcopal Diocese of Los Angeles assisting churches in developing affordable senior housing on their property, which to date has over 200 new residences moving toward construction.