Welcome to the Fall 2008 edition of The Capital Issue. The market changes of the past few months have been unprecedented, and this edition focuses on capital financing and financial strategies to help weather the storm. I would like to once again mention that if you would like to contact us, we are available to answer any questions you may have about the market's impact on your current or future financing or investment strategies.
As always, we welcome your suggestions for content. Additionally, we are considering offering The Capital Issue as a hard copy newsletter.
Thomas R. Green, CEO
The fine print clauses in bond documents are generally considered to be in case of never-events. The borrower is not supposed to default. More key in the current situation, the market is not supposed to fail. What could “never happen,” though, is happening. That fine print is now glowing in bright bold letters on the financial agendas of borrowers nationwide.
In Summer 2008, Lancaster Pollard, Critical Access Group, McClure and Associates and Graham Construction surveyed rural community hospitals that had renovated or expanded in the past three years to learn more about the projects’ scopes and impacts on health care delivery. The results were presented at the National Rural Health Association’s annual conference in October.
In this challenging credit environment, senior housing and care providers who have been averse to government financing should revisit the revamped Department of Housing and Urban Development, and historical usage figures suggest that they will.
As demand for affordable housing increases, so, too, do the expectations of current and future residents. Reinvestments and adaptations facilitated by refinancing are helping to meet the needs of a new generation, a generation expected to live longer than any before it. The next evolution of affordable housing is often called on to fill more than the basic necessity of shelter.
In unstable markets, borrowers with floating-rate debt often see increased volatility not just in their interest rate and debt service expense, but also in other aspects of the balance sheet. Given that budget items and asset values can fluctuate with the markets, it should be understood – but often isn’t – that these elements also can be used to help stabilize the balance sheet.