How to Analyze Startup Continuing Care Retirement Community Bonds
Edward C. Merrigan Director of Research B.C. Zeigler & Company
In the municipal bond arena, a continuing care retirement community (CCRC) is a nonprofit corporation providing or arranging for housing and designated health-related services to an elderly person pursuant to a residency agreement or agreements effective for the rest of the person’s life or for a specified period exceeding one year. To provide such designated health-related services, the CCRC (1) accepts an advance fee deposit or other type of entry fee and (2) charges a full or discounted periodic monthly fee. This discussion does not delve into rental communities.
The collection of advance fee deposits sets a CCRC apart from other housing bonds or, from a consumer’s point of view, from other senior living options. An analyst’s understanding of the accounting and cash flow aspects of advance fee deposits, as well as their timing and refund attributes, is critical to making an informed investment decision about a startup CCRC. Furthermore, practically all startup CCRC bond issues are floated with feasibility studies. These studies provide the core raw information that must be analyzed to discern good projects from potentially bad ones.
The purpose of this chapter is to help analysts understand the subtleties of this high-yield investment category.


Accommodations at a CCRC generally include independent ...

Get The Handbook of Municipal Bonds now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.