Last Week, Ziegler published its mid-year report on market transactions for senior living providers. Inflation, which started to have an impact on borrowing and lending trends in February, has dampened the unprecedented market demand, and thus transactions, that were hallmarks of 2021. Predominantly, fixed-rate bond issues have comprised most of the bond financing volume, whereas variable rate demand bonds have essentially not been issued since 2019. Interestingly, rated borrowers made up a lesser percentage of the fixed-rate issues than in the same period last year. New Money issuance was still the majority of financing transactions in the sector this year, albeit down 9% from the same period last year; these issuances were earmarked for new community development, campus expansions, affiliations / acquisitions, renovations and capital improvements. The adjustment that the Fed is expected to make to short-term interest rates should help stabilize the market, reduce inflation and improve market demand for borrowing later this year.
