Montereau will save millions in interest payments in the years ahead thanks to a bond refinancing, which was completed in April 2017. Ziegler, a specialty investment bank, successfully closed the $106,480,000 tax-exempt, fixed-rate Series 2017 financing for Montereau.
Montereau’s Chief Financial Officer, Angela Larson, said, “Shortly after the presidential election, bond rates got much better and the pricing of the rates provided the perfect opportunity to refinance and save Montereau millions of dollars in interest.”
The refinanced Series 2010A Bonds carried an interest rate of about 7.25 percent. The latest bond refinance lowers it to around 4.6 percent, saving Montereau more than one million dollars per year in just the first five years. The net present value of the interest savings was approximately 14 percent over the life of the bonds. “It allows Montereau to use those savings in other ways,” Angela said. The savings will help fund rising employee health insurance premiums and increasing IT costs. In addition, it is important to continue to build appropriate cash reserves, which not only improves our cash to debt ratio, but also gives flexibility to contribute capital back to Montereau or possibly pay down debt faster in the future.
The 2010A bonds refinanced the 2003 bonds, and also provided additional money to complete phase 2 of Montereau, which played a key role in developing Montereau into the premier senior living facility that you enjoy today. Phase 2 included new Garden Homes and apartments in which many of you now reside, the City View Lounge, library, the cinema/media room, exercise studio, chapel, and much more.
The 2017 bond refinancing couldn’t have been done without Ziegler. Ziegler is one of the nation’s leading underwriters of financing for not-for-profit senior living providers. Zeigler is ranked number 1 in the country in healthcare/senior living underwriters by issuance and is celebrating its 115th year of operation this year.
Angela said she is impressed with the high demand for the bond. She said there were one billion dollars in orders for bonds to more than 30 institutional investors, and approximately 10 million dollars’ worth of bonds were sold to investors in the Tulsa area.
Some of those were purchased by Montereau residents. Don Bugh says he’s fortunate he was able to make the purchase. “The interest on these bonds is several points higher than interest on alternate long-term bonds,” Don said. He added, “Purchase of these bonds enabled me to continue to be an active investor in Montereau, as it is my home.”
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