| Notes Payable and Other Debt |
NOTE 9. NOTES PAYABLE AND OTHER DEBT
See Note 9 – Notes
Payable and Other Debt in Part II, Item 8, Financial Statements and Supplementary Data, included in the Annual Report for a detailed description of all the Company's debt
facilities.
Notes payable and other debt consists of the following:
|
|
|
|
|
|
|
|
|
Senior debt—guaranteed by HUD
|
|
|
$27,933
|
|
|
$28,146
|
|
Senior debt—guaranteed by USDA(1)
|
|
|
6,893
|
|
|
6,988
|
|
Senior debt—guaranteed by SBA(2)
|
|
|
531
|
|
|
533
|
|
Senior debt—bonds
|
|
|
5,970
|
|
|
5,970
|
|
Senior debt—other mortgage indebtedness
|
|
|
7,635
|
|
|
7,728
|
|
Other debt
|
|
|
1,171
|
|
|
1,349
|
|
Subtotal
|
|
|
50,133
|
|
|
50,714
|
|
Deferred financing costs
|
|
|
(869)
|
|
|
(886)
|
|
Unamortized discount on bonds
|
|
|
(105)
|
|
|
(107)
|
|
Notes payable and other debt
|
|
|
$49,159
|
|
|
$49,721
|
|
|
|
|
|
|
|
|
|
(1)
|
U.S. Department of Agriculture (USDA)
|
|
(2)
|
U.S. Small Business Administration (SBA)
|
The following is a detailed listing of the debt facilities
that comprise each of the above categories:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior debt - guaranteed by
HUD(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Pavilion Care Center
|
|
|
Newpoint Capital
|
|
|
12/01/2039
|
|
|
Fixed
|
|
|
3.97%
|
|
|
$756
|
|
|
$765
|
|
Hearth and Care of Greenfield
|
|
|
Newpoint Capital
|
|
|
8/01/2050
|
|
|
Fixed
|
|
|
3.97%
|
|
|
1,857
|
|
|
1,868
|
|
Woodland Manor
|
|
|
Newpoint Capital
|
|
|
11/01/2052
|
|
|
Fixed
|
|
|
3.97%
|
|
|
4,775
|
|
|
4,799
|
|
Glenvue
|
|
|
Newpoint Capital
|
|
|
10/01/2044
|
|
|
Fixed
|
|
|
3.75%
|
|
|
6,790
|
|
|
6,849
|
|
Autumn Breeze
|
|
|
KeyBank
|
|
|
01/01/2045
|
|
|
Fixed
|
|
|
3.65%
|
|
|
5,906
|
|
|
5,956
|
|
Georgetown
|
|
|
Newpoint Capital
|
|
|
10/01/2046
|
|
|
Fixed
|
|
|
2.98%
|
|
|
2,999
|
|
|
3,023
|
|
Sumter Valley
|
|
|
KeyBank
|
|
|
01/01/2047
|
|
|
Fixed
|
|
|
3.70%
|
|
|
4,850
|
|
|
4,886
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$27,933
|
|
|
$28,146
|
|
Senior debt - guaranteed by
USDA(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mountain Trace
|
|
|
Community B&T
|
|
|
12/24/2036
|
|
|
Prime + 1.75%
|
|
|
9.25%
|
|
|
3,373
|
|
|
3,423
|
|
Southland
|
|
|
Cadence Bank, NA
|
|
|
07/27/2036
|
|
|
Prime + 1.50%
|
|
|
9.00%
|
|
|
3,520
|
|
|
3,565
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$6,893
|
|
|
$6,988
|
|
Senior debt - guaranteed by
SBA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southland(4)
|
|
|
Cadence Bank, NA
|
|
|
07/27/2036
|
|
|
Prime + 2.25%
|
|
|
9.75%
|
|
|
531
|
|
|
533
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$531
|
|
|
$533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents interest rates as of March 31, 2025 as adjusted for interest rate floor limitations, if applicable. The rates
exclude amortization of deferred financing costs which are approximately 0.16% per annum.
|
|
(2)
|
For the seven
SNF’s, the Company has term loans insured 100% by HUD with financial institutions. The loans are secured by, among other
things, an assignment of all rents paid under any existing or future leases and rental agreements with respect to the underlying facility. The loans contain customary events of default, including fraud or material misrepresentations
or material omission, the commencement of a forfeiture action or proceeding, failure to make required payments, and failure to perform or comply with certain
|
agreements. Upon the occurrence of certain events of default, the lenders
may, after receiving the prior written approval of HUD, terminate the loans and all amounts under the loans will become immediately due and payable. In connection with entering into loans, the facilities entered into a healthcare regulatory
agreement and a promissory note, each containing customary terms and conditions.
|
(3)
|
For the two
SNF’s, the Company has term loans with financial institutions, which are insured 70% to 80% by the USDA. The loans have an annual renewal fee for the USDA guarantee of 0.25% of the guaranteed portion. The loans have prepayment penalties of 1% through 2020, capped at 1% for the remainder of the first 10 years of the term and 0%
thereafter.
|
|
(4)
|
For one SNF,
commonly known as Southland, the Company has a term loan with a financial institution, which is insured 75% by the SBA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior debt - bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eaglewood Bonds Series A
|
|
|
City of Springfield, Ohio
|
|
|
05/01/2042
|
|
|
Fixed
|
|
|
7.65%
|
|
|
$5,970
|
|
|
$5,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents cash interest rates as of March 31, 2025. The rates exclude amortization of deferred financing of approximately 0.10% per annum.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior debt - other mortgage indebtedness
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meadowood(2)
|
|
|
Exchange Bank of Alabama
|
|
|
10/01/2026
|
|
|
Fixed
|
|
|
4.50%
|
|
|
$3,110
|
|
|
$3,153
|
|
Coosa(3)
|
|
|
Exchange Bank of Alabama
|
|
|
10/10/2026
|
|
|
Fixed
|
|
|
3.95%
|
|
|
4,525
|
|
|
4,575
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$7,635
|
|
|
$7,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents cash interest rates as of March 31, 2025 as adjusted for interest rate floor limitations, if applicable. The rates
exclude amortization of deferred financing costs of 0.34% per annum.
|
|
(2)
|
The Meadowood Credit Facility is secured by the Meadowood Facility and the assets of Coosa, which is guaranteed by Regional
Health Properties, Inc.
|
|
(3)
|
The Coosa Credit Facility, guaranteed by Regional Health Properties, Inc., includes customary terms, including events of
default with an associated annual 5% default interest rate, and is secured by the Coosa Facility and the assets of
Meadowood. Upon the occurrence of certain events of default, the lenders may terminate the Coosa Credit Facility and the Meadowood Credit Facility, and all amounts due under both credit facilities will become immediately due and
payable. The Coosa Credit Facility has prepayment penalties of 5% in the 1st year, 4% in the 2nd year and 1%
thereafter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Insurance Funding(1)
|
|
|
Various 2023
|
|
|
Fixed
|
|
|
7.63%
|
|
|
$106
|
|
|
$311
|
|
Exchange Bank
|
|
|
11/10/2025
|
|
|
Fixed
|
|
|
7.75%
|
|
|
495
|
|
|
430
|
|
Cavalier Senior Living
|
|
|
04/1/2025
|
|
|
Fixed
|
|
|
6.00%
|
|
|
68
|
|
|
104
|
|
Key Bank(2)
|
|
|
08/25/2025
|
|
|
Fixed
|
|
|
0.00%
|
|
|
495
|
|
|
495
|
|
Marlin Capital Solutions
|
|
|
06/1/2027
|
|
|
Fixed
|
|
|
5.00%
|
|
|
7
|
|
|
9
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
$1,171
|
|
|
$1,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Annual Insurance financing primarily for the Company's directors and officers insurance.
|
|
(2)
|
On December 30, 2022, Key Bank and the Company extended the maturity date from August 25, 2023 to August 25, 2025.
|
Debt Covenant Compliance
As of March 31, 2025, the Company had 16 credit related instruments outstanding that include various financial and administrative covenant requirements. Covenant requirements include,
but are not limited to, fixed charge coverage ratios, debt service coverage ratios, minimum earnings before interest, taxes, depreciation, and amortization or earnings before interest, taxes, depreciation, amortization, and restructuring or
rent costs, and current ratios. Certain financial covenant requirements are based on consolidated financial measurements whereas others are based on measurements at the subsidiary level (i.e., facility, multiple facilities or a combination of
subsidiaries). The subsidiary level requirements are as follows: (i)
financial covenants measured against subsidiaries of the Company; and (ii) financial covenants measured against third-party operator performance. Some covenants are based on annual financial metric measurements, whereas others are based on
monthly and quarterly financial metric measurements. The Company routinely tracks and monitors its compliance with its covenant requirements.
As of March 31, 2025, the Company was in compliance with the
various financial and administrative covenants related to all of the Company’s credit facilities.
Scheduled Maturities
The schedule below summarizes the scheduled gross maturities
as of March 31, 2025 for each of the next five years and thereafter.
|
|
|
|
|
|
2025
|
|
|
$6,798
|
|
2026
|
|
|
8,528
|
|
2027
|
|
|
1,334
|
|
2028
|
|
|
1,408
|
|
2029
|
|
|
1,484
|
|
Thereafter
|
|
|
30,581
|
|
Subtotal
|
|
|
$50,133
|
|
Less: unamortized discounts
|
|
|
(105)
|
|
Less: deferred financing costs, net
|
|
|
(869)
|
|
Total notes and other debt
|
|
|
$49,159
|
|
|
|
|
|
|
NOTE 9. NOTES PAYABLE AND OTHER DEBT
Notes payable and other debt consists of the following:
|
|
|
|
|
|
|
|
|
Senior debt—guaranteed by HUD
|
|
|
$28,146
|
|
|
$28,979
|
|
Senior debt—guaranteed by USDA(1)
|
|
|
6,988
|
|
|
7,259
|
|
Senior debt—guaranteed by SBA(2)
|
|
|
533
|
|
|
557
|
|
Senior debt—bonds
|
|
|
5,970
|
|
|
6,117
|
|
Senior debt—other mortgage indebtedness
|
|
|
7,728
|
|
|
8,001
|
|
Other debt
|
|
|
1,349
|
|
|
889
|
|
Subtotal
|
|
|
50,714
|
|
|
51,802
|
|
Deferred financing costs
|
|
|
(886)
|
|
|
(954)
|
|
Unamortized discount on bonds
|
|
|
(107)
|
|
|
(113)
|
|
Notes payable and other debt
|
|
|
$49,721
|
|
|
$50,735
|
|
|
|
|
|
|
|
|
|
(1)
|
U.S. Department of Agriculture (“USDA”)
|
|
(2)
|
U.S. Small Business Administration (“SBA”)
|
The following is a detailed listing of the debt facilities
that comprise each of the above categories:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior debt -
guaranteed by HUD(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Pavilion Care Center
|
|
|
Newpoint Capital
|
|
|
12/01/2039
|
|
|
Fixed 3.97%
|
|
|
$765
|
|
|
$801
|
|
Hearth and Care of Greenfield
|
|
|
Newpoint Capital
|
|
|
08/01/2050
|
|
|
Fixed 3.97%
|
|
|
1,868
|
|
|
1,909
|
|
Woodland Manor
|
|
|
Newpoint Capital
|
|
|
11/01/2052
|
|
|
Fixed 3.97%
|
|
|
4,799
|
|
|
4,891
|
|
Glenvue
|
|
|
Newpoint Capital
|
|
|
10/01/2044
|
|
|
Fixed 3.75%
|
|
|
6,849
|
|
|
7,077
|
|
Autumn Breeze
|
|
|
KeyBank
|
|
|
01/01/2045
|
|
|
Fixed 3.65%
|
|
|
5,956
|
|
|
6,154
|
|
Georgetown
|
|
|
Newpoint Capital
|
|
|
10/01/2046
|
|
|
Fixed 2.98%
|
|
|
3,023
|
|
|
3,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sumter Valley
|
|
|
KeyBank
|
|
|
01/01/2047
|
|
|
Fixed 3.70%
|
|
|
4,886
|
|
|
5,027
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
28,146
|
|
|
28,979
|
|
Senior debt - guaranteed by
USDA(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mountain Trace
|
|
|
Community B&T
|
|
|
12/24/2036
|
|
|
Prime + 1.75% 10.25%
|
|
|
3,423
|
|
|
3,539
|
|
Southland
|
|
|
Cadence Bank, NA
|
|
|
07/27/2036
|
|
|
Prime + 1.50% 10.00%
|
|
|
3,565
|
|
|
3,720
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
6,988
|
|
|
7,259
|
|
Senior debt - guaranteed by
SBA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southland(4)
|
|
|
Cadence Bank, NA
|
|
|
07/27/2036
|
|
|
Prime + 2.25% 10.75%
|
|
|
533
|
|
|
557
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
533
|
|
|
557
|
|
Total debt
|
|
|
|
|
|
|
|
|
|
|
|
$35,667
|
|
|
$36,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents interest rates as of December 31, 2024 as adjusted for interest rate floor limitations, if applicable. The rates
exclude amortization of deferred financing costs which are approximately 0.16% per annum.
|
|
(2)
|
For the seven
SNF’s, the Company has term loans insured 100% by HUD with financial institutions. The loans are secured by, among other
things, an assignment of all rents paid under any existing or future leases and rental agreements with respect to the underlying facility. The loans contain customary events of default, including fraud or material misrepresentations
or material omission, the commencement of a forfeiture action or proceeding, failure to make required payments, and failure to perform or comply with certain agreements. Upon the occurrence of certain events of default, the lenders
may, after receiving the prior written approval of HUD, terminate the loans and all amounts under the loans will become immediately due and payable. In connection with entering into loans, the facilities entered into a healthcare
regulatory agreement and a promissory note, each containing customary terms and conditions.
|
|
(3)
|
For the two
SNF’s, the Company has term loans with financial institutions, which are insured 70% to 80% by the USDA. The loans have an annual renewal fee for the USDA guarantee of 0.25% of the guaranteed portion. The loans have prepayment penalties of 1% through 2020, capped at 1% for the remainder of the first 10 years of the term and 0%
thereafter.
|
|
(4)
|
For one SNF,
commonly known as Southland, the Company has a term loan with a financial institution, which is insured 75% by the SBA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eaglewood Bonds Series A
|
|
|
City of Springfield, Ohio
|
|
|
05/01/2042
|
|
|
Fixed 7.65%
|
|
|
$5,970
|
|
|
$6,117
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
$5,970
|
|
|
$6,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents interest rates as of December 31, 2024 as adjusted for interest rate floor limitations, if applicable. The rates
exclude amortization of deferred financing costs of approximately 0.10% per annum.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meadowood(2)
|
|
|
Exchange Bank of Alabama
|
|
|
10/01/2026
|
|
|
Fixed 4.50%
|
|
|
$3,153
|
|
|
$3,237
|
|
Coosa(3)
|
|
|
Exchange Bank of Alabama
|
|
|
10/10/2026
|
|
|
Fixed 3.95%
|
|
|
4,575
|
|
|
4,764
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
$7,728
|
|
|
$8,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents interest rates as of December 31, 2024 as adjusted for interest rate floor limitations, if applicable. The rates
exclude amortization of deferred financing costs of 0.34% per annum.
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(2)
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The Meadowood Credit Facility is secured by the Meadowood Facility and the assets of Coosa, which is guaranteed by Regional
Health Properties, Inc.
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(3)
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The Coosa Credit Facility, guaranteed by Regional Health Properties, Inc., includes customary terms, including events of
default with an associated annual 5% default interest rate, and is secured by the Coosa Facility and the assets of
Meadowood. Upon the occurrence of certain events of default, the lenders may terminate the Coosa Credit Facility and the Meadowood Credit Facility, and all amounts due under both credit facilities will become immediately due and
payable. The Coosa Credit Facility has prepayment penalties of 5% in the 1st year, 4% in the 2nd year and 1% thereafter.
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Other debt
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|
|
|
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First Insurance Funding(1)
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|
|
03/01/2025
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|
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Fixed
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3.65%
|
|
|
$311
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|
|
$369
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Exchange Bank
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|
11/10/2025
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Fixed
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|
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7.75%
|
|
|
430
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|
|
—
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Cavalier Senior Living
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|
04/1/2025
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|
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Fixed
|
|
|
6.00%
|
|
|
104
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|
|
—
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KeyBank(2)
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|
|
08/25/2025
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|
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Fixed
|
|
|
0.00%
|
|
|
495
|
|
|
495
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Marlin Capital Solutions
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|
|
06/01/2027
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Fixed
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|
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5.00%
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|
|
9
|
|
|
25
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Total
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|
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|
|
$1,349
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|
|
$889
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(1)
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Annual Insurance financing primarily for the Company’s directors’ and officers’ insurance.
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(2)
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On December 30, 2022, Key Bank and the Company extended the maturity date from August 25, 2023 to August 25, 2025.
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Debt Covenant Compliance
As of December 31, 2024, the Company had approximately 16 credit related instruments outstanding that include various financial and administrative covenant requirements. Covenant requirements include,
but are not limited to, fixed charge coverage ratios, debt service coverage ratios, minimum earnings before interest, taxes, depreciation, and amortization or earnings before interest, taxes, depreciation, amortization, and restructuring or
rent costs, and current ratios. Certain financial covenant requirements are based on consolidated financial measurements whereas others are based on measurements at the subsidiary level (i.e., facility, multiple facilities or a combination of
subsidiaries). The subsidiary level requirements are as follows: (i) financial covenants measured against subsidiaries of the Company; and (ii) financial covenants measured against third-party operator performance. Some covenants are based on
annual financial metric measurements whereas others are based on monthly and quarterly financial metric measurements. The Company routinely tracks and monitors its compliance with its covenant requirements.
At December 31, 2024, the Company was in compliance with the
various financial and administrative covenants related to all of the Company’s credit facilities.
Scheduled Minimum Debt Principal
payments and Maturity payments
The schedule below summarizes the scheduled gross minimum
principal payments and maturity payments as of December 31, 2024 for each of the next five years and thereafter.
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2025
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$7,010
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2026
|
|
|
8,613
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2027
|
|
|
1,322
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2028
|
|
|
1,393
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2029
|
|
|
1,469
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Thereafter
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30,907
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Subtotal
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50,714
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Less: Deferred financing costs, net
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(886)
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Less: Unamortized discounts
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(107)
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Total notes and other debt
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$49,721
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