Sonida Senior Living, Inc. (the “Company,” “Sonida,”) (NYSE:
SNDA), a leading owner-operator of communities and services for
seniors, announced the execution of its loan modifications with
Fannie Mae in tandem with strong September and Q3 2023 occupancy
growth.
As previously announced on June 29, 2023, Sonida entered into a
comprehensive forbearance agreement with Fannie Mae as the first of
a two-step process to modify all existing mortgage agreements with
Fannie Mae.
On October 2, 2023, Sonida and Fannie Mae entered into loan
modification agreements covering all 37 Fannie Mae mortgaged
communities, which finalizes the previously announced comprehensive
restructuring. The terms of the Fannie Mae loan modifications were
consistent with those set forth in the June 29, 2023 forbearance
agreement.
Key elements of the loan modifications include:
- All maturities under the 37 Fannie Mae loans have been extended
to December 2026 or later.
- All contractually required principal payments under the 37
Fannie Mae loans have been deferred for three years or waived until
maturity, resulting in $33.0 million of cash flow savings through
maturity.
- Sonida received near-term interest rate reduction on all 37
assets, resulting in $6.1 million in cash interest savings from
June 2023 through May 2024.
- Sonida to provide two $5 million principal payments to be
applied against the loan balances. The first paydown was funded in
June 2023 and the second will be funded in June 2024.
As previously announced, Conversant Capital committed to
purchase up to $13.5 million of common equity at $10 per share over
an 18-month period following the date of its commitment. Sonida
shall have the right, but not the obligation, to utilize
Conversant’s equity commitment and may draw on the commitment in
whole or in part. The Company drew $6.0 million in July, in
conjunction with the first $5.0 million principal payment to Fannie
Mae. The remaining funds may be drawn as needed for general working
capital needs or to fund the second $5.0 million loan paydown due
to Fannie Mae.
Also, as previously announced, in connection with the Fannie
loan modifications and the Conversant equity commitment, Ally Bank
agreed to temporarily reduce the minimum liquidity requirement
under its $88.1 million facility with the Company for 18 months
(effective June 1, 2023), subject to certain conditions that the
Company expects to meet.
The loan modification agreements along with the modified
liquidity requirements with Ally Bank will contribute significantly
to the Company’s ongoing financial stability.
The Company continues to engage in dialogue with its other
significant lending partner, Protective Life, regarding potential
modifications or repurchases, among other possibilities. The
Company remains optimistic for positive near-term outcomes.
Q3 Performance
Spot occupancy ended September at 86.8% for the Company’s owned
communities, and average occupancy for Q3 increased approximately
100 basis points from Q2 2023. Average rate continues to be a
significant component of the Company’s 2023 NOI margin expansion
with a year-over-year increase in average rate of 9.8% through the
first nine months of the year.
“The debt restructuring along with strong Q3 occupancy gains
have created significant momentum for us as we move into the final
quarter of the year,” said Kevin Detz, Chief Financial Officer.
“Our strong results and sequential improvement throughout the first
nine months of the year are a testament to our ongoing focus on
operational excellence and our team’s dedication to providing
high-quality care and personalized service that enhances our
residents’ quality of life.”
“We are very pleased with the Company’s strong operating results
and the completion of the loan modifications with Fannie Mae. Our
performance throughout the year, coupled with the ongoing support
from our investors and lenders, remains a key point of
differentiation in the current economic climate,” said Brandon
Ribar, President and CEO. “We believe Sonida is at an exciting
inflection point with our balance sheet repositioning nearly behind
us and continued portfolio performance improving, allowing us to
pivot our focus towards growth. Many owners, operators and lenders
across senior living are actively identifying strategic
alternatives for their existing assets; our goal this year has been
to make the needed improvements to our balance sheet,
organizational structure and operations to position Sonida to be
the consolidator of choice in the industry as it continues to
evolve.”
Safe Harbor
This release contains forward-looking statements which are
subject to certain risks and uncertainties that could cause our
actual results and financial condition of Sonida Senior Living,
Inc. (the “Company,” “we,” “our” or “us”) to differ materially from
those indicated in the forward-looking statements, including, among
others, the risks, uncertainties and factors set forth under “Item.
1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2022, filed with the Securities and
Exchange Commission (the “SEC”) on March 30, 2023, and “Item. 1A.
Risk Factors” in our Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2023, filed with the SEC on August
14, 2023, and also include the following: the impact of COVID-19,
including the actions taken to prevent or contain the spread of
COVID-19, the transmission of its highly contagious variants and
sub-lineages and the development and availability of vaccinations
and other related treatments, or another epidemic, pandemic or
other health crisis; the Company’s ability to generate sufficient
cash flows from operations, additional proceeds from debt
financings or refinancings, and proceeds from the sale of assets to
satisfy its short- and long-term debt obligations and to make
capital improvements to the Company’s communities; increases in
market interest rates that increase the cost of certain of our debt
obligations; increased competition for, or a shortage of, skilled
workers, including due to the COVID-19 pandemic or general labor
market conditions, along with wage pressures resulting from such
increased competition, low unemployment levels, use of contract
labor, minimum wage increases and/or changes in overtime laws; the
Company’s ability to obtain additional capital on terms acceptable
to it; the Company’s ability to extend or refinance its existing
debt as such debt matures, including the Company’s ability to
complete the modifications to its loan agreements; the Company’s
compliance with its debt agreements, including certain financial
covenants and the risk of cross-default in the event such
non-compliance occurs; the Company’s ability to complete
acquisitions and dispositions upon favorable terms or at all; the
risk of oversupply and increased competition in the markets which
the Company operates; the Company’s ability to improve and maintain
controls over financial reporting and remediate the identified
material weakness discussed in its recent Quarterly and Annual
Reports filed with the SEC; the departure of the Company’s key
officers and personnel; the cost and difficulty of complying with
applicable licensure, legislative oversight, or regulatory changes;
risks associated with current global economic conditions and
general economic factors such as inflation, the consumer price
index, commodity costs, fuel and other energy costs, competition in
the labor market, costs of salaries, wages, benefits, and
insurance, interest rates, and tax rates; and changes in accounting
principles and interpretations.
About Sonida
Dallas-based Sonida Senior Living, Inc. is a leading
owner-operator of independent living, assisted living and memory
care communities and services for senior adults. The Company
provides compassionate, resident-centric services and care as well
as engaging programming operating 71 senior housing communities in
18 states with an aggregate capacity of approximately 8,000
residents, including 61 communities which the Company owns and 10
communities that the Company manages on behalf of third parties.
For more information, visit www.sonidaseniorliving.com or connect
with the Company on Facebook, Twitter or LinkedIn.
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version on businesswire.com: https://www.businesswire.com/news/home/20231010909430/en/
Sonida Investor and Media Contact Kevin Detz
kdetz@sonidaliving.com
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