Lutheran Services Carolinas just completed a massive $186 million financing, receiving the lowest interest rate a nonrated senior living organization has ever obtained.
On June 10, 2021, Truist Securities secured the $186,830,000 tax-exempt bonds for LSC. The financing includes a combination of $145,580,000 fixed rate bonds and $41,250,000 bank financing provided by Truist Bank.
The bond offering resulted in orders totaling $1.5 billion, ten times over-subscribed. The impact for LSC of that high demand is lower-than-expected interest rates through 2051, with the all-in total interest cost of 3.37 percent.
Proceeds are funding the construction of Trinity Landing, a 184-unit senior living community on the Intracoastal Waterway in Wilmington, N.C. When it opens in 2022, Trinity Landing will join Trinity Grove, a skilled nursing community, to form the region’s only continuing care retirement community on the water.
All of LSC’s existing debt was also refinanced, including recent expansions in Albemarle and Clemmons and existing bonds. In order to take advantage of the current interest rate environment, Truist Securities sold $37 million of fixed rate bonds through a forward delivery, another first for a tax-exempt nonprofit.
There was strong retail interest in the bond offering, said LSC Chief Financial Officer Kirby Nickerson, and 28 institutional investors placed orders, including big names like Goldman Sachs, T. Rowe Price, and Vanguard.
“This financing will provide our ministry with a firm foundation to further our vision of Abundant Living for all God’s children,” said LSC President Ted Goins. “This strategic foundation will give LSC stability and opportunity for the next 30 years. In addition to funding Trinity Landing, this financing will help LSC grow and make improvements to our facilities and programs across North Carolina.”
“We are indebted to so many people who made this a success: our residents, the Board of Trustees, CFO Kirby Nickerson, all 1,900 LSC teammates, LSC attorney Kevin McIntosh, Truist, financial advisor John Franklin, and so many more,” Goins said.