Carmel Manor

Matt Goldreich | James Conahan

On September 29, 2022, Cain Brothers successfully closed the Kentucky Economic Development Finance Authority Healthcare Facilities Revenue Refunding Bonds, Series 2022 Carmel Manor, Inc. Project on behalf of Carmel Manor, Inc. and its sponsor, The Carmelite System, Inc.

The proceeds from the Series 2022 tax-exempt public fixed-rate bonds were used to refinance an existing bank loan and pay certain costs of issuance. As part of the refinancing, an outstanding fixed-pay interest rate swap that hedged the refunded bank loan was terminated and resulted in a $1.4 million positive termination payment to Carmel Manor. The Series 2022 financing was structured as interest-only bonds with a single bullet principal payment due at maturity. The Carmelite System Obligated Group (“BBB+” by Fitch) provided a Guaranty of the principal payment. All interest through final maturity was prefunded by The Carmelite System, Inc. and its sponsor, The Carmelite Sisters for the Aged and Infirm, and will be held in a trustee account. The prefunded, interest-only structure serves to eliminate the requirement for Carmel Manor to make debt service payments during the next 5 years and improve cash flow while management implements various improvement plans to better position Carmel Manor for a debt restructuring at the end of, or prior to, the 5-year bond maturity

Cain Brothers acted as Sole Manager.

Carmel Manor is a Kentucky based not-for-profit corporation that operates a senior care facility, the sole corporate member of which is The Carmelite System, Inc. Carmel Manor is licensed to operate 95 skilled nursing beds, 80 personal care beds and provides short-term rehab services. The Carmelite System is a New York not-for-profit corporation, and the sole corporate member of several not-for-profit corporate affiliates, including Carmel Manor, that operate skilled nursing, assisted living and independent living facilities that serve communities in Florida, Illinois, Iowa, Kentucky, Massachusetts, New York, Ohio and Ireland. The Carmelite System was formed in 1999 as a Catholic not-for-profit health system sponsored by the Carmelite Sisters for the Aged and Infirm and has been a long-standing client of Cain Brothers.