Belgium care home operator, Senior Assist, issues €186m 11-year BBB bond to finance the re-acquisition of 20 senior care homes
The bond issuance allowed Senior Assist to re-acquire ownership of the homes that it already operated under long leases from Cofinimmo, a listed Belgian real estate firm. 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 separately to either the operating or the property part of the business.
S&P assigned a 'BBB' (stable) long-term issue rating to the bonds which pay a fixed coupon of 3.6% and have an 11 year maturity. The credit rating reflects supportive demographic trends and the stable regulatory environment for care provision in Belgium.
The structuring of this transaction as a project finance bond illustrates the increasing flexibility now available from public bond markets 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: “This is the first project finance style securitisation in the European care home sector and provides an efficient funding structure for Senior Assist. As the demand for elderly care grows across Europe this innovative approach to financing will best support the increased provision in the sector.”
Ben Fry, Managing 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, and it demonstrates the benefit of governments providing a strong and stable regulatory framework for elderly care. We are pleased to have supported Senior Assist in this refinancing which enables further development of their care business.”
TradeRisks also acted as financial advisor and were advised by Allen & Overy. Senior Assist was supported by Ambos (legal), Laga and Deloitte (tax), Operis (model audit) and JLT (insurance).