Bonds Direct is an efficient way for the project owner to both access 4% LIHTC’s through bond issuance and reduce transaction expenses including negative arbitrage expenses.
Columbus, OH (PRWEB) March 31, 2012
Comprehensive capital provider RED CAPITAL GROUP, LLC (“RED”) recently structured a $7,500,000 tax-exempt bond financing for the construction of Franklin Station, a 100-unit apartment property in Columbus, Ohio which will serve elderly and special needs homeless persons. The sponsor of the project is the Columbus Metropolitan Housing Authority (“CMHA”).
The project enjoyed broad support at both the county and state levels, as it had a number of components including an allocation of 4% low income housing tax credits, and it also utilized Red Capital Markets, LLC’s (MEMBER FINRA/SIPC) proprietary Bonds DirectSM structure, whereby the bonds are issued on a staggered basis to align with construction needs of the project. As construction advances are made, coinciding increments of bonds are issued and then purchased directly by related entity Red Capital Partners, LLC, which uses its own capital to facilitate the multiple funding requests.
Joseph R. Hague, Red Capital Markets, LLC’s lead banker on the transaction said, “Bonds Direct is an efficient way for the project owner to both access 4% LIHTC’s through bond issuance and reduce transaction expenses including negative arbitrage expenses. It is a creative solution that can mean the difference between getting a deal done or not.”
Financing for Franklin Station was finalized in February 2012, and a Groundbreaking Ceremony recently was held on March 16, 2012 in Columbus, Ohio. Other transaction participants included the Federal Home Loan Bank (grant provider); Ohio Capital Corporation for Housing (tax credit syndicator); Franklin County, Ohio (bond issuer) and Ohio Housing Finance Agency (tax credit allocation).