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IAC Closes Seventh Pooled Bond....Could See Two More This Year
Posted 03/03/04
By Michael McDonald
The makings of a new not-for-profit credit are beginning to
emerge in New York’s tax-exempt bond market. Last week
the InterAgency Council of Mental Retardation and
Developmental Disabilities Agencies closed its seventh
pooled bond sale, bringing the umbrella group a growing
portfolio of tax-exempt debt.
With the most recent deal - $14.68 million in American
Capital Access-insured, A-rated bonds - IAC, as the
group is known, said it has sold a total of around $60
million in debt for more than 20 of its 120 not-for-profit
members. Only the latest of the deals has carried an
insured rating - the previous deals, dating back to 1999,
came unrated and, in the case of the first two, were done
as private placements, the group said.
IAC said it expects to be back in the market with a $10
million to $15 million deal this summer and may even do
a third before the year is out. In the most recent deal,
which was sold through the New York City Industrial
Development Agency and the Suffolk County
Industrial Development Agency, it pooled financing
for eight member organizations, each of which receives
funding from New York’s Office of Mental Retardation and
Developmental Disabilities.
The eight beneficiaries were Bais-Ezra Inc., Center for
Family Support, Creative Lifestyles Inc., HASC Center
Inc., Lifespire Inc., Ostar Family Services Inc., Ostar
Early Childhood Center, and Working Organization for
Retarded Children Inc.
Richard Bosch, IAC’s associate executive director, said
he expects the group to eventually earn an investment-grade
rating. Since the bonding program was
inaugurated, IAC has worked with Dallas-based
Municipal Capital Markets Group as sole senior
manager and Hawkins, Delafield & Wood as bond
counsel.
Bosch said the companies were picked through a private
request for proposals.
The group, whose member organizations are in the New
York metropolitan area, has sold most of its deals
through the New York City IDA. Bosch said IAC could sell
debt for other unaffiliated mental health not-for-profits in
metro area and also has established a new relationship
with an Albany-based statewide group, the New York
State Association of Community and Residential Agencies,
that could lead to deals.
The New York City IDA said it is looking to build on its
work as a conduit for IAC by doing pooled bond deals for
other organizations in the city’s not-for-profit sector.
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