A senior-living company filed for bankruptcy this week after it exhausted an emergency loan, the latest to falter because of Covid-19.
Nashville Senior Care LLC’s plight illustrates the pressures bearing down on the senior-living sector. Higher staff and supply costs on top of tepid demand for such facilities have caused defaults to outpace the rest of the municipal bond market this year. About 8% of the $43 billion in outstanding senior-living bonds is in default, compared with less than 1% of the total municipal bond market, according to data compiled by Bloomberg.
“This difficult combination of rising costs and a lower census, coupled with a high debt load from their financing, led to the Debtors’ default under their bond documents,” added Johnson, founder of the nonprofit Trousdale Foundation, which owns the facilities. Invesco was the biggest bondholder as of June 30, with about $77 million, according to data compiled by Bloomberg. A spokesperson for Invesco declined to comment.
An “acute liquidity crisis” in the weeks before the filing led the company to seek an emergency loan from its trustee, UMB Bank N.A., of $1.35 million so it could continue to operate as it prepared to file for bankruptcy protection and find a new owner.
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