HJ Sims Secures $6.5 million Additional Debt Financing


HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, is pleased to announce the successful August 2020 transaction in the amount of $6.5 million additional debt financing for capital improvements for the Philadelphia Protestant Home (PPH). PPH operates a continuing care retirement community in northeast Philadelphia, featuring 266 independent living units, 175 personal-care units and 126-bed nursing facility.

PPH has been funding capital improvements from general fund revenues. To efficiently manage cash-flow, PPH elected to finance $6.5 million of upcoming capital improvements. Sims, as financial advisor, developed a financing plan that provided for the funding of the required capital improvements, while implementing a structure that maintained maximum flexibility to maintain their debt service at manageable levels.

Prior to engaging PPH's existing banking partner, Citizens Bank (Citizens), Sims worked with the PPH Fiscal Oversight Committee to develop structuring options. Following engagement of Citizens, Sims led the effort in working with Citizens to finalize the debt structure, within the confines of the bank's requirements. Due to impacts of COVID-19, Sims negotiated a modified Debt Service Coverage test to the benefit of PPH. The additional obligations were structured as parity debt with PPH's outstanding Series 2015 obligations.

Citizens provided $6.5 million of senior debt financing, fully amortizing in ten-years, and a five-year interest-only period followed by monthly principal amortization. The obligations were structured with a five-year, PPH-owned par call provision, and were issued on a tax-exempt basis through the Philadelphia Authority for Industrial Development (PAID). This provision was paramount as PPH's existing Series 2015 Obligations mature in seven years, while Citizens could only defer principal on the Series 2020 obligations for five years. This call feature will allow PPH to restructure future debt at minimal cost.

Following closing of the Series 2020 Bonds, PPH locked in a synthetic fixed-rate on the debt. Sims served as Swap Advisor for the swap transaction, which also bears a mirroring, PPH-owned par termination right in five years, to align with the Citizens' loan.

Sims, Citizens, PAID and the financing team worked diligently with PPH to secure final approvals, including navigating through unanticipated delays followed by the onset of COVID-19, to successfully close the financing.

"The HJ Sims' commitment to incomparable client services has once again served The Philadelphia Protestant Home well. Despite the unforeseen challenges and uncertainly resulting from the pandemic, the Sims' team provided valuable insight and unwavering advocacy to assure our financing needs were achieved. We are thankful for our partnership, the integrity, and collaboration with Aaron Rulnick and Siamac Afshar, for always putting what is in the best interest of PPH, first," said John Dubyk, CEO, PPH. Philadelphia Protestant Home.

ABOUT HJ SIMS: Founded in 1935, HJ Sims is a privately held investment bank and wealth management firm. Headquartered in Fairfield, CT, HJ Sims has nationwide investment banking, private client wealth management and trading locations. Member FINRA, SIPC. Facebook, LinkedIn, Twitter, Instagram.

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