Capital Senior Living Corporation Refinances $110 Million of Debt; Interest Rate Fixed at 6.29%; $15 Million Debt Reduction; Approximately $3.8 Million in Annual Interest Savings.DALLAS -- Capital Senior Living Corporation (NYSE NYSE See: New York Stock Exchange :CSU See DSU/CSU. 1. CSU - California State University. 2. CSU - Cleveland State University. 3. CSU - Channel Service Unit. ) (the "Company"), one of the country's largest operators of senior living communities, today announced that it has completed a $110 million refinancing Refinancing An extension and/or increase in amount of existing debt. of mortgage debt on 15 owned communities. These 15 mortgages have a term of 10 years and a fixed interest rate of 6.29% for the first nine years of the term. At the beginning of the tenth year, the loans will convert to a floating interest rate to provide flexibility regarding financing alternatives at that time. Principal on the loans will amortize amortize To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. over 25 years. The loans are cross-collateralized and cross-defaulted with release provisions. As part of the refinancing, the Company has paid down approximately $15 million of principal, which is anticipated to reduce interest expense by approximately $1.3 million. Consequently, $110 million of fixed rate debt has replaced approximately $125 million of variable rate debt previously on these properties. The 6.29% fixed interest rate on the remaining principal is approximately 230 basis points below the previous level, which carried variable interest rates tied to the London Interbank Offered Rate London Interbank Offered Rate A short-term interest rate often quoted as a 1,3,6-month rate for U.S.dollars. ("LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). ). By fixing this interest rate, the Company anticipates further annual interest savings of approximately $2.5 million. "This refinancing has improved the Company's profitability, while further strengthening our financial position," said James A. Stroud This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , Chairman of the Company. "We were pleased to take advantage of the current interest rate environment to fix this debt at such an attractive rate." The loans were arranged by Capmark Finance Inc. ("Capmark'), formerly known as GMAC GMAC General Motors Acceptance Corporation GMAC Graduate Management Admission Council GMAC Give Me A Call GMAC Genetic Manipulation Advisory Committee GMAC Genetic Modification Advisory Committee (Singapore) GMAC Give Me A Chance Commercial Mortgage, Inc., and were placed with the Federal Home Loan Mortgage Corporation Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, privately owned, government-sponsored organization that uses private capital to buy home mortgages as a means to help lower housing costs. ("Freddie Mac Freddie Mac: see Federal Home Loan Mortgage Corporation. "). Capmark is part of Capmark Financial Group, Inc., a leading real estate financial company with three core businesses: lending and mortgage banking, investments and funds management and loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. . The company operates in America, Europe and Asia. William E. Shine, Executive Vice President of Capmark, added "Capmark was very pleased to have an opportunity to enhance its relationship with one of the premier seniors housing operators in the country. Freddie Mac's fixed-to-float program was a great financial fit for this portfolio of assets and the execution by all parties was outstanding." "We have now fixed or capped the interest rates on our entire wholly-owned portfolio and successfully completed one of our major objectives for 2006," said Lawrence A. Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , Chief Executive Officer of the Company. "We own 25 communities with mortgage debt of approximately $194 million. Of this total, 21 communities have mortgage debt of approximately $161 million at fixed interest rates averaging approximately 6.20%. The other four communities are presently being refinanced and their $33 million of debt is expected to carry interest at LIBOR plus 260 basis points. We have purchased an interest rate cap that limits LIBOR to 5.0% and thus will limit this debt to a maximum rate of 7.60%. Consequently, the blended average rate on our entire portfolio of owned communities will be approximately 6.50%." A schedule detailing the first year incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. effects of the significant transactions completed by the Company in 2006 is attached. ABOUT THE COMPANY Capital Senior Living Corporation is one of the nation's largest operators of residential communities for senior adults. The Company's operating philosophy emphasizes a continuum of care, which integrates independent living, assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. and home care services, to provide residents the opportunity to age in place. The Company currently operates 60 senior living communities in 22 states with an aggregate capacity of approximately 9,200 residents, including 35 senior living communities which the Company owns or in which the Company has an ownership interest, 18 leased communities and 7 communities it manages for third parties. In the communities operated by the Company, 80 percent of residents live independently, 18 percent of residents require assistance with activities of daily living and 2 percent receive skilled nursing services. This release may contain certain financial information not derived in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), including adjusted EBITDAR Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring Costs - EBITDAR An indicator of a company's financial performance calculated as: = Revenue - Expenses (excluding tax, interest, depreciation, amortization, and restructuring costs) , cash earnings, cash earnings per share and other items. The Company believes this information is useful to investors and other interested parties. Such information should not be considered as a substitute for any measures derived in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Reconciliation of this information to the most comparable GAAP measures is included as an attachment to this release. The forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this release are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company's ability to complete the refinancing of certain of our wholly owned communities, realize the anticipated savings related to such financing, find suitable acquisition properties at favorable terms, financing, licensing, business conditions, risks of downturns in economic conditions generally, satisfaction of closing conditions such as those pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to licensure licensure (lī´s  nsh , availability of insurance at commercially
reasonable rates, and changes in accounting principles and
interpretations among others, and other risks and factors identified
from time to time in our reports filed with the Securities and Exchange
Commission.
Contact Ralph A. Beattie, Chief Financial Officer, at 972-770-5600 or Matt Hayden, Hayden Communications, Inc. at 858-704-5065 for more information.
Capital Senior Living Corporation
First Year Incremental Effects of 2006 Completed Transactions
($ millions)
GE Towne 3 Property CGIM 6
Healthcare Centre Sale/ Property
JV Midwest Sale/ Leaseback Sale/
Portfolio Leaseback Leaseback
----------- ---------- ---------- ----------
Release Date 1/13/2006 4/04/2006 5/31/2006 6/05/2006
Effective Date 4/1/2006 4/1/2006 5/1/2006 5/31/2006
Transaction Value $46.9 $29.0 $54.0 $43.0
Resident and Healthcare
Revenue -- -- -- 11.6
Management Services
Revenue 0.5 -- -- (0.6)
EBITDAR 0.5 -- -- 4.1
Depreciation -- (0.6) (1.4) --
Lease Expense -- 2.3 4.3 3.4
Amortized Gain -- 1.5 1.3 0.4
Interest Savings -- 1.3 2.4 --
Pre-Tax Profit 0.5 1.1 0.8 1.1
Total Gain -- 14.5 13.0 3.5
Cash Proceeds -- 12.7 24.0 4.5
Debt Retirement -- 16.2 29.3 --
15
Rose Property
Arbor Refinance Total
-------- ---------- -------
Release Date 6/12/06 6/13/06
Effective Date 6/08/06 6/09/06
Transaction Value $19.1 $110.0 $302.0
Resident and Healthcare Revenue 4.7 -- 16.3
Management Services Revenue -- -- (0.1)
EBITDAR 1.9 -- 6.5
Depreciation -- -- (2.0)
Lease Expense 1.5 -- 11.5
Amortized Gain -- -- 3.2
Interest Savings -- 3.8 7.5
Pre-Tax Profit 0.4 3.8 7.7
Total Gain -- -- 31.0
Cash Proceeds -- (15.0) 26.2
Debt Retirement -- 15.0 60.5
Note: Based on annualized April 06 results
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