Approval given to exchange $57 million in defaulted bonds

The St Johns County Commission unanimously approved a resolution allowing the issuance of a bond exchange for non-taxable fixed-rate Health Care Refunding Revenue Bonds, originally issued in 2006, through the St. Johns County Industrial Development Authority for Series 2014 bonds for the Glenmoor Project located in the The Neighborhoods Of The Slammer and Squire of World Golf Village.

Historic City News learned on July 3rd last year that Life Care St. Johns, Inc., the borrower, had defaulted on certain bond provisions and filed a voluntary petition under Chapter 11 of the Bankruptcy Code.

The new bonds, Series 2014A and Subordinate Series 2014B Bonds, will effectively restructure the obligation to the Series 2006 bondholders, including surviving family members of former residents of the continuing care retirement facility. The payment obligations of the Industrial Development Authority under the Series 2006 Bonds will be exchanged to the holders of the new Series 2014.

The Industrial Development Authority approved this request for an aggregate principal amount not to exceed $57,145,893.75 at their meeting on March 10, 2014 — that approval was enacted through the resolution adopted by the Commission this morning.

The obligations through this bond exchange do not constitute a debt, liability or obligation of the County, the State of Florida or of any political subdivision thereof, but will be payable out of funds pledged and assigned under a Loan Agreement between Life Care St. Johns, Inc. and the Industrial Development Authority.