ZCS Special Report – Municipal Bond, Fixed Rate Default Study of Not-For-Profit Continuing Care Retirement Communities
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In April, Ziegler Credit Surveillance released its 2026 CCRC Default Study. This study focuses on not-for-profit CCRCs that have issued public market bond debt since 1990. We examined this pool of debt for payment defaults on the bonds – technical covenants like coverage or liquidity violations are not included.
Recent default trends are very positive – there was only one new payment default early on in 2025, with none in 2026 so far. We are also monitoring far fewer providers at risk than usual. For context, the average number of defaults since 2000 was 3.3 per year and during the 2020-2024 COVID period was 5.2 per year. We believe that defaults will stay at a low level for at least the next two years, barring any other extreme events.
Here are a few key statistics from the entire study period going back to 1990:
- $71.2 billion in debt was issued for 786 unique borrowers in 1,627 bond issues
- We believe that most facilities are represented at least once in the data
- 11.8% of the borrowers and 8.6% of issues in the study defaulted at some point
- Most defaulted borrowers continued operating in some way, whether through a bond restructuring or a sale to another NFP or FP operator
- The Net Default Rate (Recovery adjusted) was 2.8%
- This represents par amounts lost by bondholders after all actual and projected recoveries are accounted for
- The average post-default recovery was about 63 cents on the dollar