Amsterdam at Harborside Posts Restructuring Plan by `Mistake’

The Amsterdam at Harborside's bond trustee posted a proposed restructuring plan that would impair holders of $230 million of revenue bonds on the Municipal Securities Rulemaking Board's EMMA website.

The posting Friday morning was a "mistake" and the document was removed promptly, said Jim Davis, chief executive officer of the luxury continuing care retirement community in Nassau County, N.Y.

While the document was replaced with a blank PDF, the details outlined in the mistakenly posted trustee notice were accurate, including a 75% fixed rate recovery for bondholders in the form of a prepackaged Chapter 11 bankruptcy filing early next week, according to a bondholder who declined to be identified by name. The debtor's counsel is Cadwalader, Wickersham & Taft LLC and bondholders are represented by Mintz Levin, Davis and the bondholder confirmed.

According to the posted restructuring plan, the Series 2007A and Series 2007B bonds will be exchanged for newly issued Series 2014A bonds "in the aggregate principal amount equal to approximately 75%." The 2014A bonds will bear interest rates in a range of 5.875% to 6.70%, identical to the original rates, with a final maturity date of 2049, a six year extension of the original final maturity date.

The recovery rate would be a healthy jump compared to recent trading, which has priced the senior-most bonds in the mid-50% range, to yield a little over 12%.

The Amsterdam at Harborside has roughly $230 million debt outstanding between its Series 2007A, 2007B, and 2007C bonds, according to its financial statements.

A bankruptcy proceeding is necessary to confirm the restructuring plan as only a majority, not all, of the bondholders have agreed to the haircuts, the bondholder said.

The Amsterdam at Harborside tapped the municipal market in 2007, issuing nearly $300 million through the Nassau County Industrial Development Agency to break ground on a retirement facility. It ran into a liquidity crunch when its sales team had difficulty selling its high-end units during the housing market collapse in Long Island.

UMB, the Amsterdam's bond trustee, and Cadwalader did not return calls requesting comment.

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