Bond/Loan, Consulting or Both:
NHA Contributions: NHA developed month-by-month cashflows for the City’s local return from Measures M and R that provided a detailed look into the flow of funds for the revenues securing the bonds. NHA also managed the credit rating process and, through discussions with the rating agency, optimally sized and structured the bonds to increase coverage. This resulted in a 1-notch rating upgrade to “AA-” and saving the City an estimated $410,000 in interest costs over the life of the bonds. The “AA-” rating also removed the need for an insurance policy for the bonds, saving the City an estimated $240,000 in closing day costs. Combined, the optimized structure and resulting “AA-” rating from S&P helped save the City approximately $650,000. NHA also worked with the underwriter to solicit bids for a stand-alone surety on the transaction.
Project Completion: October 2019
NHA Contact: Eric Scriven, Mike Meyer and Christian Sprunger
Unique Characteristics of Project: Streets Rehabilitation financing secured by local return of County Wide Sales Tax Measures. Negotiations on structure with S&P resulted in a 1-notch increase in rating from preliminary indications. Negotiated a stand-alone surety with the bond insurer. Issuing the bonds required the City to obtain written approval from LA County Metropolitan Transportation Authority to use the City’s share of local return for security on the bonds.
Executive Summary: Developing a financing for a $48MM revenue bond secured by the City’s Local Return of LA County’s sales tax Measures M and Measure R. Purpose of the financing was to help the City to invest in new road improvements and rehabilitate transportation links throughout critically important parts of the community as part of Lancaster’s Revive 25 initiative.