UPDATED with additional comment and explanation on Baptist Home of Philadelphia's bond default.
"Deer Meadows Retirement Community is not closing nor are we going out of business nor are we going to be taken over nor are we selling," despite late payments for four months earlier this year on the Baptist nursing home's $27.5 million in bond debt, says Lisa Sofia, president and CEO of the Baptist nursing home in Northeast Philly.
Sofia blamed the default and late payments on last fall's cut in Medicare reimbursements, the nationwide decline in home values that has made it difficult for some patients to pay for their care at the 332-bed skilled-nursing and residential complex, and other pressures.
After she was promoted to chief executive in January, Sofia says she was forced to lay off 30 of the 300-member staff, including office workers; bond trustees applied debt-reserve funds to make the delayed bond payments. Sofia says she's working to assure lenders led by U.S. Bancorp that a plan to pay down bank debt with the cost savings and reduced losses is in place.
"All our (bondholders) have now been paid up to date," principal and interest, "to which they were entitled, she added. Bondholders for the fixed- and floating-rate bonds, first issued in 1998, include Invesco Ltd. and Oppenheimer Funds, according to SEC filings.