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MassDevelopment In The News
MassDevelopment to Weigh Underwriters for Refunding
February 2, 2007: The Bond Buyer, by Michelle Kaske
The Massachusetts Development Finance Agency will review proposals for investment banking services for its subsidiary, the Saltonstall Building Redevelopment Corp.
The search for underwriting services is in anticipation of an upcoming refunding of the agency’s 2002 Series A bonds. Lehman Brothers was the lead underwriter for that $1.6 million sale.
Members from both MassDevelopment’s real estate and investment banking departments will review the proposals, which are due Feb. 21. Qualifications include an understanding of the agency’s financial needs, strong structuring abilities, personnel experience, and a capacity for underwriting tax-exempt debt, according to the RFP. Once the agency begins reviewing the applications it will decide whether to choose a single underwriter or a team of investment banking firms.
The authority would like to make its selection by March 12, in hopes of entering the market shortly after making a decision.
"We’d like to be ready to sell the bonds as soon as we can afterwards, but first we need to select an underwriter," said Steve Chilton, MassDevelopment’s senior vice president for investment banking.
The Saltonstall subsidiary was formed to help redevelop a 22-story office tower in Boston’s financial district that was closed in 1998 due to the presence of asbestos. In July 2000, the state chose MassDevelopment as the site’s developer among a pool of applicants. The agency then sold $91.6 million of debt in 2002 to help renovate the building and make the structure safe for public use, and to create 75 residential units surrounding the tower. About 98% of the office portion is leased, with 11,444 square feet of space available on the 21st floor.
The mixed-use development includes office space for state government departments, private companies, ground-level retail shops, and 75 condominiums. The residential section includes 19 affordable units and 56 market-value condos with an overall average selling price of $751,286 according to MassDevelopment documents.
Construction on the project began in 2001 with an overall cost of $199 million. The first public-sector tenants moved into the building in January 2004, with private sector tenants arriving later that year in August. The agency signed its first retail lease for the building in October 2005. The following month, the Building Owners and Managers Association named the tower its Boston Building of the Year.
MassDevelopment was second only to the commonwealth itself as the largest borrower in the state last year, selling $1.1 billion through 36 issues. The commonwealth sold $2.3 billion of debt in 2006, according to Thompson Financial.
© Copyright 2007 The Bond Buyer.
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