Maryfield, N.C., faces cost overrun on $94.32 million series 2005 bonds

By Cristal Cody

Springdale, Ark., April 10 - Maryfield Inc. in North Carolina has reported that the proceeds from the $94.315 million series 2005 A, B and C bonds will not be sufficient to complete an assisted living and nursing home project and has asked for money to be released from a redemption fund.

The nonprofit group priced the $67.315 million series 2005A and $3 million 2005B first mortgage revenue bonds and $24 million variable-rate demand first mortgage revenue bonds through the North Carolina Medical Care Commission to build the Pennybyrn at Maryfield independent living units and renovate the group's nursing home facility.

The project has gone over cost by $4.8 million, according to a material event notice.

The group has asked Bank of America, the credit facility provider, to allow the $3 million initial project entrance fees in the series C redemption fund to be used, along with other funds provided by the company, to pay for the completion of the project.

Maryfield has deposited $500,000 in the construction account and plans to deposit another $1.85 million to complete the project.

If the funds are approved, $1.5 million would be transferred immediately from the redemption fund to the construction account fund.

The remaining $1.5 million would be used to pay any additional cost overruns or for a redemption fund for the series C bonds.

If the amendment to the series C bonds is approved, a letter of credit agreement will require the holders of the 2005A and 2005B bonds to forgo certain rights if the company defaults before the project is completed.

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