New York education, healthcare and non-profit issuers with strong credit can expedite their transactions under new guidelines approved by the Dormitory Authority of the State of New York.
DASNY announced Monday that its board has approved a policy that allows borrowers with at least an A rating the ability to move to the market faster. It also reduced the scenarios for which it requires debt-service reserves.
Only a single DASNY board approval is now required for higher education and healthcare clients in the 'A' rating category. Previously, the policy applied only to clients that had issued through DASNY in the prior 48 months. Debt service reserve funds are also no longer required for higher education and healthcare clients rated A or higher.
"These changes are very important to DASNY's future and its ability to continue financing and building the universities, hospitals and libraries that make New York a better place to live," said DASNY Board Chair Alfonso L. Carney in a statement. "We have an obligation to level the playing field so we can do what we do best."
For new transactions, higher education and health care entities rated double-A or triple-A can direct their bond trustee to release funds as they need them. All borrowers in new deals can also use third-party bidding agents for their escrows rather than DASNY under the new policy.
DASNY president & CEO Gerrard P. Bushell recently conducted a months-long "listening tour," the authority said, during which issuers told him the authority should offer faster service and greater flexibility.
"We listened, we heard and we acted," said Bushell.
The changes aren't aimed at increasing the number of deals, but is instead at removing barriers for those looking at coming to market, Bushell told The Bond Buyer after a Monday speech at the Municipal Forum of New York.
"We know that it is important for borrowers to get to the market as quickly as possible," said Bushell in his speech. "Streamlining the approval process from two meetings to one will make the financing process more efficient."
DASNY says it continues to require high standards for document preparation and review prior to board approval, including tax diligence, adherence to the Tax Equity and Fiscal Responsibility Act and the State Environmental Quality Review Act.
"These welcomed changes position DASNY as an important financing partner to help support health care transformation for hospitals and health systems with access to capital markets," said Healthcare Association of New York State President Dennis Whalen. "HANYS applauds DASNY's fresh look and smart improvements to financing policies, and we look forward to a continued partnership to address the persistent capital needs of hospitals across the state."
Bushell was tapped to lead DASNY by Gov. Andrew Cuomo after working as a senior relationship advisor in BNY Mellon's alternative and traditional investment management businesses.
"We're saying that we want to be an advocate, we want to be solution-oriented," Bushell said Monday.
DASNY was founded in 1944 and has an outstanding bond portfolio of roughly $47.3 billion as of Sept. 30. The state agency has issued more than $9 billion in tax-exempt debt in 2015.
