Healthcare Borrowers Obtain Loans Despite Volatile Market Swings

The economic experts aren't predicting an immediate end to the current cycle of denial, hope and panic that has been causing interest rates, stock prices, commodity prices and exchange rates to fluctuate wildly since the onset of the credit crisis last summer.

"At this point, after all the lumps the markets have been taking, the recent projection by the International Monetary Fund (IMF) that the U.S. economy will tip into a modest recession this year followed by a gradual recovery in 2009 sounds almost upbeat," senior housing/healthcare funding expert Jeffrey A. Davis observes.

Davis is chairman of Cambridge Realty Capital Companies, one of the nation's leading senior housing/healthcare lenders with more than $2.75 billion in 300 closed transactions since the mid-1990s. The IMF prediction, he notes, contrasts sharply with the Bush administration's much more optimistic forecast earlier this year, which projected a 2.7% growth rate for 2008 followed by 3.1% growth in 2009.

"The IMF expects the U.S. growth rate to shrink to 0.5% in 2008 and 0.6% in 2009. Given the bleak outlook for housing, to most observers the IMF projection probably seems closer to the mark," Davis said.

He points out that the IMF's baseline projection that U.S. home prices could decline between 14% and 22% in 2007 and 2008 is unprecedented for the U.S. but not elsewhere in the world.

While most segments of the senior housing/healthcare industry are more 'recession proof' than other industries, Davis says there is now some concern that the housing slump is a factor in the lower occupancy levels for independent living communities reported by the National Investment Center for the Seniors Housing & Care Industry (NIC). Mean occupancy was up slightly during the third quarter of 2007 for assisted living, skilled nursing and continuing care retirement communities but down slightly, from 93% to 91%, for independent living communities.

"But, overall, the industry appears to be in good shape to ride out even a protracted economic downturn," Davis believes.

He points out that the Federal Reserve Board lowered short-term interest rates again in March by three-quarters of a percentage point to 2.5%. And the one-month LIBOR Index rate has declined to 2.70% from 5.32% at this time last year.

"Primarily because of the current liquidity crisis, commercial mortgage loans hardly reflect declines of this magnitude. But funds are available for viable projects, with FHA-insured HUD loans especially attractive at this time," he said.

Privately owned since its founding in 1983 as a real estate investment banker specializing in commercial real estate properties, Cambridge emerged in the 1990s as one of the nation's leading senior housing and healthcare debt and equity capital providers, closing more than 300 such transactions totaling more than $2.75 billion since then.

The company is one of the nation's leading HUD 232 FHA/MAP-approved lenders and also has an integrated debt/equity financing strategy that includes direct property acquisitions and joint ventures; sale/leasebacks for clients; conventional and mezzanine debt financing; and acquisition of distressed debt. Additionally, Cambridge offers a wide array of conventional lending options for senior housing/healthcare owners, including permanent construction and interim loans on either a floating or variable rate basis.

Link: http://www.abfjournal.com/story.asp?id=22889

Healthcare Collateral Consulting, LLC (Healthcare ABL Services)

Healthcare Collateral Consulting, LLC offers outsourced due diligence services including field examinations, credit, underwriting, risk analysis and account management for healthcare lenders, including banks, asset-based lenders, private equity and institutional investors. HCC's associates have extensive healthcare experience in credit, collateral, underwriting, audit, workout management, operations, and account management. "HCC's services are designed to provide a customized solution".

Managing Director and President - David J. Lacasse has more than 11 years of experience in asset based lending, healthcare finance, and medical device manufacturing, most recently managing the loan portfolio for a prior healthcare finance business since 2004.

Healthcare Collateral Consulting, LLC
healthcarecollateralconsulting@gmail.com
Fairfield County, Connecticut
203-610-2515

CMS PROPOSES TO EXPAND QUALITY PROGRAM FOR HOSPITAL INPATIENT SERVICES IN FY 2009

The Centers for Medicare & Medicaid Services (CMS) today proposed additional steps to strengthen the tie between the quality of care provided to Medicare beneficiaries and payment for the services provided when they are in the hospital.

CMS is proposing to expand the list of conditions which are reasonably preventable through proper care and for which Medicare will no longer pay at a higher rate if the patient acquires them during a hospital stay. In addition, CMS is adding 43 new quality measures for which hospitals will have to report data in order to receive the full annual payment update for their services.

“CMS is taking aggressive actions to ensure that beneficiaries get safe, high quality, and efficient care from their health care providers, and the actions we are announcing today build on our efforts,” said CMS Acting Administrator Kerry Weems. “The status of the Medicare Hospital Insurance Trust Fund requires us to find the best solutions to ensure that Medicare stays strong while paying providers appropriately for the care they deliver. The reforms we are proposing in this rule should lead to greater value for Medicare beneficiaries and the Medicare program.”

The proposed regulation builds on efforts across Medicare to transform the program to a prudent purchaser of health care services, paying based on quality of care, not just quantity of services. CMS is also making hospital quality and cost information available to help consumers make more informed choices. On March 28, CMS posted updated pricing and quality information at www.hospitalcompare.hhs.gov, along with the results of surveys of patients about their experience with the care they received while in the hospital.

The proposed rule would apply to services provided to patients who are discharged from the hospital during fiscal year (FY) 2009, which begins on October 1, 2008.

Full Excerpt: http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=3041&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date

This link was brought to you by: Healthcare Collateral Consulting, LLC - Providing Ourtsourcing Services to Healthcare Lenders.

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GE Capital to Acquire Bulk of CitiCapital

GE Capital has agreed to purchase most of CitiCapital, Citigroup's North American commercial lending and leasing business, in an all-cash transaction.

Financial terms were not disclosed and the acquisition is expected to close, pending normal regulatory approvals, by the third quarter of this year.

According to a press release on GE's Web site, through the transaction, GE Capital will acquire seven CitiCapital equipment finance business lines, including Healthcare Finance, Private Label Equipment Finance, Material Handling Finance, Franchise Finance, Construction Equipment Finance, Bankers Leasing, and CitiCapital Canada. CitiCapital's Tax Exempt Finance business is not part of the transaction and will remain with Citi.

When completed, the deal will add approximately $13.4 billion in assets to GE Capital's Commercial Finance business. CitiCapital has approximately 1,400 employees and 160,000 customers throughout North America.

In addition, GE Capital and Citi are exploring strategic cross-sell relationships with commercial clients.

"This acquisition represents another significant growth opportunity for GE-one that helps us offer more to customers," said Mike Neal, GE vice chairman. "CitiCapital is a well established franchise with experienced employees, broad capabilities and a terrific customer base. It's a business we know how to grow. We acquired and successfully integrated CitiCapital's Transportation Financial Services Group in 2005."

The transaction is part of Citigroup's efforts to direct capital to core businesses and drive operational efficiency.

"This transaction allows Citigroup to release capital from non-core areas and redistribute that capital to areas with the greatest opportunities for profitable growth," said Peter Knitzer, chairman and CEO of Citibank North America. "This divestiture further streamlines our business and better positions the firm to leverage marketplace opportunities to benefit our shareholders."

http://www.abfjournal.com/story.asp?id=22791

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