Belgium care home operator, Senior Assist, issues €161,170,000 30-year bonds in two transactions to finance the acquisition and development of senior care homes
On issue date €53.5m of the bonds were sold, with a further €107.7m retained by the issuer for future sale. The initial bond proceeds will allow Senior Assist to acquire two operational homes and develop one new senior care home, the development is supported through a deferred profile to manage cost of carry. The structure contains the flexibility to incorporate up to five more homes into the portfolio in the coming years through the sale of the retained bonds.
By financing the combined operating business and real estate portfolio under a project finance contractual framework, Senior Assist was able to access significantly cheaper sources of finance than those available through traditional financing routes in the sector.
The un-rated bonds pay a fixed coupon of 3.2% and have a 30-year maturity. The tight pricing and long maturity reflects the comfort institutional investors take from the supportive demographic trends and the stable regulatory environment for care provision in Belgium.
The bonds were structured, arranged and placed by TradeRisks – an independent debt arranger and corporate finance firm based in London. The bonds were placed through private auctions, avoiding the execution risk associated with traditional bank syndications of bonds. The investment was funded through asset managers based in London acting for European pension funds and insurers.
Bart Vanderschrick, Chief Executive of Senior Assist International, said: “Building on the success of the Silverstone-I refinancing, we have now been able to apply the same project bond structure to support our growth through new acquisitions and developments. In a period of sector consolidation it is valuable to have a proven funding platform that can continue supporting our business.”
John Coleman, Director of TradeRisks, said: "This transaction highlights that capital markets are increasingly willing to fund a wide range of transactions with security of stable cashflows. We are pleased to have supported Senior Assist in this financing which further supports the growth of their care business.”