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MassDevelopment In The News
MassDevelopment To Sell Up To $380 Million for Several Projects
June 19, 2007: The Bond Buyer, by Michelle Kaske
The Massachusetts Development Finance Agency last week authorized up to $380 million of debt, with higher educational institutions and assisted living developments receiving the bulk of the approved borrowing.
MassDevelopment will sell $185 million of fixed-rate bonds on behalf of Boston College for land acquisition, capital improvements, and refunding. Of the roughly $100 million of new-money proceeds, $25 million will help finance the purchase of 18 acres of land from the Roman Catholic Archdiocese of Boston. The school will pay a total of $65 million for the land and the existing buildings on the site.
A tentative closing date has been set for Aug. 1, according to Mark Connor, the college’s assistant treasurer. Use of the land, which is adjacent to the campus, has yet to be determined but may include academic buildings and additional student housing. The remaining new-money proceeds will support renovations to several academic buildings and the purchase of laboratory equipment.
Roughly $80 million will refund two series previously issued through the Massachusetts Health and Educational Facilities Authority, potentially generating roughly $3 million or 8% net present value savings and locking in $42 million of variable rate debt to fixed-rate, Connor said.
Lehman Brothers will price the deal in mid-July and Public Financial Management Inc. is financial advisor. Bond counsel is Edwards, Angell, Palmer & Dodge LLP. The bonds will not carry insurance, according to Jami Loh, first vice president at MassDevelopment.
Boston College has $524 million of outstanding debt and carries AA-minus and Aa3 ratings from Standard and Poor’s and Moody’s Investors Service, respectively. Undergraduate tuition for the 2006-2007 school year was $33,000. Demand at the private Jesuit institution continues to be high as the college received 29,000 applications for 2,300 spots for the upcoming school year, according to Connor.
Erikson Retirement Communities will receive up to $165 million of bond proceeds when MassDevelopment sells debt on behalf of the assisted-living developer towards the end of July. Proceeds will help finance construction of 96 assisted living apartments, 1,703 independent living units, and space for 132 skilled nursing beds at Linden Ponds Inc., a retirement community in Hingham.
Zeigler Capital Markets Group will price the variable-rate bonds and Ropes & Gray LLP is bond counsel. There is no outside advisor. Linden Ponds is about 20 miles south of Boston along the Atlantic coast and does not carry credit ratings.
MassDevelopment approved up to $22 million of refunding for Babson College, although the transaction may not price until August or later, depending on market conditions, according to Loh. Lehman Brothers will price the deal and Edwards Angellis bond counsel. There is no outside financial advisor and insurance has yet to be determined.
Moody’s and Standard & Poor’s rate the school A3 and BBB-plus, respectively. Moody’s revised the college’s outlook to stable from negative in March. Standard & Poor’s will release an updated report on the credit before the sale, according to Marc Savaria, an analyst at the agency.
Babson College is a private business school that offers both undergraduate and graduate degrees and is located 14 miles west of Boston. Full-time undergraduate tuition for the 2007-2008 school year is $34,112. MassDevelopment also approved $15.7 million of privately-placed debt, of which MetroWest YMCA will receive $7 million of bond proceeds.
© Copyright 2007 The Bond Buyer.
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