Fitch: Nonrated Descriptive Report on The Washington & Jane Smith Community-Beverly, Illinois.

TAMPA, Fla. -- Today, Fitch Ratings plans to release its nonrated descriptive report on the approximately $63.22 million Illinois Finance Authority, series 2005 A-C. Fitch's descriptive credit report provides analysis of significant credit factors and includes Fitch's evaluation of the strengths and risks surrounding this credit. No request was made for a rating on this transaction, and Fitch did not review all information or complete all procedures necessary to reach a final credit rating. Generally, Fitch regards un-enhanced debt issued with financial characteristics similar to the described facility as being below investment-grade. The bonds are expected to be priced the week of Dec. 19, 2005, by Ziegler Capital Markets Group.

Smith Senior Living (the corporation) will use the proceeds of the series 2005 A-C bonds (the bonds), together with other funds, to redevelop an existing type B continuing care retirement community (CCRC) on the southwestern side of Chicago, Illinois, currently called The Washington and Jane Smith Community-Beverly. After the redevelopment project, the facility will be renamed Smith Village. The corporation is an Illinois not-for-profit corporation, the predecessor of which was established in 1929. The current facility consists of a three-story building that is licensed for 167 available sheltered-care units and 94 skilled-nursing beds. Approximately 91 of the sheltered-care beds are operated as independent living units (ILUs) and 76 are operated as assisted living units (ALUs).

The redevelopment of the facility will occur in two phases. Phase I is the construction of a four-story assisted living facility, which would contain 58 traditional assisted living units and 24 memory support ALUs. Construction on phase I began in November 2004 and is scheduled to be completed in December 2005. Phase I is on time and on budget. Phase II will begin with the demolition of the existing sheltered care units in March 2006. Upon completion of the demolition, a new independent living building containing 152 ILU apartments will be constructed. In addition to the new ILUs and related common space, seven rooms currently being used for dementia care in the nursing building will be converted to eight new semiprivate nursing beds (four rooms) and three rooms for administrative use.

The primary strengths of Smith Village include its long history of services in the primary market area (PMA), low cancellation rate of presales, favorable demand indicators as evidenced by a low net market penetration rate of 2.6%, sound service area characteristics, and the experience of the development company, New Life Management & Development, LLC (New Life). No comparable CCRCs are in the PMA. However, there are eight other CCRCs located within 20 miles of the facility that will likely compete with Smith Village.

Main credit concerns include the traditional risks associated with start-up projects such as construction and fill-up delays. Additional risks include the relatively low presale rate of 68%, high debt burden (until the variable-rate bonds are redeemed with initial entrance fee proceeds), and the significant competition from the secondary service area.

Fitch believes that while start-up or facilities undergoing major redevelopment such as Smith Village do not possess the credit profile to be rated in the investment-grade category, the development, finance and construction team, favorable market characteristics, and sound level of presales, should allow the redevelopment project at Smith Village to succeed.

For a copy of the credit analysis, see the Fitch web site at www.fitchratings.com or contact Market Services at [phone].

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