SUNNYSIDE’s LONG TERM DEBT
1) obtain additional funds for needed capital projects at all three facilities, 2) reduce the interest rates on existing debt, and 3) obtain more favorable loan covenants.
In addition, the new debt cannot be changed by the bank until 2027 (old term was 2020). All the debt is, and will be, corporate debt, meaning that it is for all three facilities and will be secured by a first deed of trust on corporate-wide assets
Current debt is as follows:
Fixed Rate Tax Exempt Bonds - $ 9,475,000 3.00% - 6.50% (No Change) Variable Rate Bank Qualified Debt - $ 19,962,840 - 0.45% rate reduction Variable Rate Non-bank Qualified Debt - $ 10,675,600 - 0.75% rate reduction Taxable Loan (University Plaza) - $ 1,247,278 - Term extended to 2025 Total Debt $ 41,607,718
The anticipated major capital projects at the three facilities are:
Sunnyside - Bistro addition at the Highlands Sunnyside - Expansion of Wellness Center Summit Square - Construction of a Memory Care Unit Kings Grant - Construction of a Memory Care Unit
The current estimated cost of these planned capital projects is approximately $10 million. In addition, a portion of the new money borrowing will be used for upcoming smaller capital expenditures at Sunnyside. The non-bank qualified portion of the existing debt will be refinanced as bank-qualified, which will significantly reduce the interest rate as noted above.
The effect of the refinancing portion of this debt issue will result in a net savings of over $1.1 million in interest during the next 10 years. The new borrowings will fund needed capital projects, while the associated loan covenants will be less stringent. --Charlie Lotts