Fitch Rts Goodwin House's (Fairfax County, Virginia) $147.4MM Ser 2007 Bonds 'BBB'; Outlook Stable.CHICAGO -- Fitch has assigned a 'BBB' rating to the expected $147.4 million Fairfax County Economic Development Authority Residential Care Facility Mortgage Revenue Bonds, Series 2007 (Goodwin House Please help in articles on . After links have been created, remove this message. Goodwin House is a prominent heritage building in Ottawa, Canada. GHI German Historical Institute (Washington, DC) GHI Ghost Hunters International GHI Geohazards International GHI Gustav Heinemann-Initiative ) $51.7 million series 2005 variable rate demand bonds, listed below. The Rating Outlook is Stable. The series 2007 bonds are expected to be structured as traditional fixed rate bonds. Bond proceeds will be used to refund approximately $11.7 million of the outstanding series 2005 variable rate demand revenue bonds, fund approximately $144.0 million of costs related to the construction of a 15 story, 106-unit independent living expansion at the Goodwin House Bailey's Crossroad site, reimburse re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. GHI for $9.7 million of project costs related to the Health and Wellness Center expansion at Bailey's Crossroads, fund a debt service reserve fund and 36 months of capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. and pay costs of issuance. The series 2007 bonds are expected to price in early May through negotiation led by Ziegler Capital Markets. The 'BBB' rating reflects GHI's strong liquidity position relative to expenses, improved operating results since 2002, excellent service area and demand characteristics, solid coverage of pro-forma maximum annual debt service (after payoff of the series 2005 bonds) and strong management practices. At Sept 30, 2006 GHI's unrestricted cash and investments totaled $81.2 million which translates into a strong 838 days cash on hand. The doubling of unrestricted cash and investment since 2002 has been driven by improved operating performance combined with consistent turnover entrance receipts. Management's focus on operating performance has caused GHI's operating ratio Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: to improve to 98.6% in fiscal 2006 from 111.8% in fiscal 2003 and 135.4% in fiscal 2002. Excess margins have been robust over the last 3 years ranging between 9.2% and 13.5% and easily outpacing Fitch's 'BBB' medians. GHI's facilities benefit from their locations just south of Washington DC in the City of Alexandria and Fairfax County Virginia (general obligation bonds rated 'AAA' by Fitch). The primary market area has experienced strong population growth, has very high wealth levels and a strong and diverse economic and employment base. Real estate prices are very high and the market has seen strong appreciation with average home values above $500,000. Finally, Fitch met with management and the board of GHI and believes the organization benefits from the expertise, diversity and oversight of Board. Certain members of the Board have expertise in law, banking, real estate development, general contracting, project management and/ or architecture which has been applied to the Bailey's Crossroads project. Fitch's primary credit concerns are GHI's increased debt burden and the effects of a delay in construction completion and/ or fill up of the new independent units. With the issuance of the series 2007 bonds, many of GHI capital-related ratios will be below Fitch's 'BBB' medians until the new units are filled and additional revenues are generated. Pro-forma maximum annual debt service (MADS) increases to $9.4 million (assuming the redemption of the series 2005 bonds from initial entrance fees) from prior MADS of $3.3 million. Pro-forma historical debt service coverage in fiscal 2006 falls to 1.5 times (x) while pro-forma MADS as a percentage of total fiscal 2006 revenues increases to a high 20.9%. However, upon projected stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders in 2012 many of GHI's leverage ratios should moderate and approach current 'BBB' medians. Management anticipates the construction of the Bailey's Crossroads expansion to be completed by January 2010 with 95% occupancy achieved by June 2011. Initial entrance fees generated by the new units are expected to total roughly $43.5 million which will be used to redeem the series 2005 bonds by fiscal 2012. A delay in construction completion, project cost over runs and/ or an inability to fill the units could weaken GHI's financial profile and increase debt service costs. The pro-forma MADS used in Fitch's analysis assumes redemption of the VRDBs and does not include any principal or interest expense associated with the series 2005 bonds. The Rating Outlook is Stable. Fitch believes that GHI should meet or exceed management's financial projections. The risks associated with the Bailey's Crossroad expansion have been minimized due to a solid pre-sale level on the new units in excess of 80%, execution of guaranteed maximum price A Guaranteed Maximum Price (also known as GMP, Not-To-Exceed Price, NTE, or NTX) contract is a cost-type contract (also known as an open-book contract) where the contractor is compensated for actual costs incurred plus a fixed fee subject to a ceiling price. construction contracts with provision for liquidated damages Monetary compensation for a loss, detriment, or injury to a person or a person's rights or property, awarded by a court judgment or by a contract stipulation regarding breach of contract. and the engagement of an experienced project manager. Goodwin House, Inc. is a type A continuing care continuing care a professional convention that a veterinarian who is treating an animal is obliged to continue treating that case unless an arrangement is made with its custodian to transfer the care to another practitioner or to a specialist. retirement community that operates campuses in the City of Alexandria and Fairfax County, Virginia Fairfax County is a county in Northern Virginia, in the United States. As of 2005, the estimated population of the county is 1,041,200;[1] making it by far the most populous jurisdiction in the Commonwealth of Virginia, and larger than seven states. . Goodwin House Alexandria consists of 279 independent living apartments, 42 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. units, 68 nursing care beds and 12 dementia dementia (dĭmĕn`shə) [Lat.,=being out of the mind], progressive deterioration of intellectual faculties resulting in apathy, confusion, and stupor. In the 17th cent. beds. Goodwin House Bailey's Crossroads consists of 237 independent living apartments, 48 assisted living beds and 70 nursing care beds. GHI's total revenues in fiscal 2006 were $44.8 million. GHI will covenant to provide financial and utilization data directly to each NIRMSIR and each requesting bondholder Bondholder A firm often has stockholders and bondholders. In a liquidation, the bondholders have first priority. bondholder An individual or institution that owns bonds in a corporation or other organization. within 150 days of each fiscal year end and 45 days of each fiscal quarter end. New Issue: --$148,800,000 Fairfax County Economic Development Authority Residential Care Facility Mortgage Revenue Bonds Series 2007 (Goodwin House) 'BBB' Outstanding Issues (as of Dec 31, 2006): --$51,755,000 City of Alexandria Industrial Development Authority Variable Rate Demand Revenue Refunding Bonds refunding bond A bond that is issued for the purpose of retiring an outstanding bond. Issuers refund bond issues to reduce financing costs, eliminate covenants, and alter maturities. See also crossover refunding bonds, prerefunding. series 2005 (Goodwin House) 'BBB'* *Underlying rating. The bonds are enhanced by a direct pay letter of credit issued by Wachovia Bank, N.A. which Fitch was asked to rate. A portion of the series 2005 bonds are expected to be redeemed with the proceeds of the series 2007 bonds. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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